There are many types of Debt Consolidation options available to you if you are under financial strain and struggling to make ends meet. Debt consolidation is a way of combining all your debts into one affordable payment over a fixed term. The benefits of this include securing a lower rate of interest, having a longer repayment period, no creditor hassle and the convenience of servicing just one loan.
There are many options available where Debt Consolidation is concerned and we can help you to find the right one for you. You can choose to consolidate your debts without the need for a loan by looking at the following options;
- DEBT MANAGEMENT PLAN
- TRUST DEEDS
Alternatively you could look at consolidating your debts with a loan by taking out;
- SECURED LOAN
- UNSECURED LOAN
- REMORTGAGE
- BAD CREDIT LOANS
Here is a brief overview of the above options to help you understand which option is best suited to your circumstances.
An IVA (individual voluntary agreement) is a form of government legislation to help towards clearing your debts. An IVA is legally binding and enables you to write off up to 75% of what you cannot afford to pay. If you are in employment, have over £15,000 of unsecured debts and can afford a minimum of £200 a month to pay towards them an IVA might be a good option for you to take. An affordable payment is calculated based on your income and expenditure and is paid over a 60 month term. At the end of this time any debt remaining is written off and you are free to make a fresh financial start debt free.
A Debt Management Plan is a simple way to pay your unsecured debts over a fixed period of time. An affordable payment is calculated based on your income and expenditure, interest and charges can be frozen and hassle from creditors will be eliminated. You must owe at least £2,000 of unsecured debts, have at least 2 creditors and can afford at least £100 a month to pay toward your debts. A Debt Management Plan can be a short term option to paying your debts.
Trust Deeds are only available to people who live in Scotland or have lived in Scotland at some point in their life for at least six months. Trust deeds can only take into account unsecured debts but there is no minimum amount to be owed to qualify for one. One affordable payment is calculated and paid monthly usually over a 36 month time period, after this time any remaining debts are written off.
A allows a debtor to borrow money and pledge assets as collateral. In most cases property is generally used as collateral for secured loans therefore some risk is involved if the debtor fails to keep up repayments over the agreed time of the loan.
An Unsecured Loan can be a very good way of consolidating debts accrued by credit cards. By comparison the interest rates on unsecured loans are generally a lot lower then the interest a debtor may pay on credit and store cards. Unsecured Loans can therefore save money on interest charges.
Remortgaging enables you to borrow money against your home by releasing equity in your property. This equity can then be used to clear your unsecured debt. You must ensure that you can meet the repayments when remortgaging your property as failure to do so could put your home at risk from being repossessed.
Bad credit loans can be useful if you have adverse credit history and find it hard to raise finances. You will be subject to higher interest charges and should only look at bad credit loans for short term borrowing as they can lead to financial difficulties.
For free help and advice on which is the right solution for you, call our friendly team at Debt Help.uk.net on 0845 459 9940 or use our free call back service. |
