| Consolidating debt is often the best way to ease | | | | your home if you miss payments. Only take this route |
| financial pressures but before you jump in there are a | | | | if you are certain that you can make the repayments. |
| number of steps which can improve your position and | | | | Depending upon how bad your credit history is, so long |
| guide you through the options available | | | | as you maintain all your payments for the following 1 to |
| If you are having trouble balancing your income and | | | | 3 years, you can replace this loan with a mortgage or |
| expenditure because of large debts then read on and | | | | re mortgage once your credit score improves. There |
| discover your options in credit card debt consolidation. | | | | will be penalties however if you repay a secured loan |
| Debt consolidation can be an excellent option when | | | | early. Ensure you read the fine print. |
| you find your finances getting out of control but before | | | | 7) A loan secured on other assets |
| you go out and sign up for a debt consolidation loan | | | | If you have an expensive car, boat or plane you will |
| there are a number of factors you must take into | | | | probably be able to obtain finance using these assets |
| account. | | | | as security. The rate of interest will be higher than a |
| 1) Why are you looking to consolidate debt? | | | | loan secured on property. If you do not have property |
| The basic principle of debt consolidation is that you | | | | or it is fully mortgaged securing a loan on other assets |
| take out a single loan and use that loan to repay all | | | | may be an option. |
| your existing credit card debts, loans and overdrafts. | | | | 8) An unsecured loan |
| This normally results in lower payments generally | | | | If you do not have property or other assets an |
| spread over a longer term. Before you proceed with | | | | unsecured loan is often a possibility. An unsecured loan |
| debt consolidation you should first consider whether | | | | is usually over a shorter term, normally up to a |
| there is a better alternative. | | | | maximum of 7 years but occasionally longer. As a |
| 2) Sell assets to clear your debt | | | | result the monthly payments will be higher but the debt |
| Rather than rescheduling your debts see if there is any | | | | will reduce quickly. |
| way you can repay some or all of your debts yourself. | | | | As the lender has no security your property and |
| Sell unwanted valuables and other items. | | | | assets are less at risk if you default. The lender could, |
| Depending on the item you can sell to dealers, | | | | however, send in the bailiffs if they obtain a court |
| advertise in local classified ads or through Ebay. Sell | | | | order. |
| unwanted books through Amazon. If your debts are | | | | Because there is no security expect to pay a higher |
| very high and you own your own home consider | | | | interest rate, particularly if you have a poor credit |
| downsizing to release equity. | | | | history. |
| 3) Pay more than the minimum off your credit cards. | | | | 9) Don't forget the credit card option. |
| If you can pay more than the minimum monthly | | | | If your debts are relatively low and you still have a |
| payments you should seriously consider continuing with | | | | reasonable credit history applying for another card with |
| your existing credit cards and clear the debts over the | | | | a 0% or low interest balance could be an alternative to |
| next 12 to 18 months. | | | | a debt consolidation loan. |
| While it may mean restricting your spending in other | | | | Go for a 0% balance transfer if you can realistically |
| areas it will be the cheapest option long term. Of | | | | repay all or most of the debts in the 0% balance |
| course you may still opt for debt consolidation to make | | | | transfer period. If however, there will still be a |
| managing your debt easier. | | | | substantial debt at the end of the balance transfer |
| 4) If you are currently only just managing to pay the | | | | period go for a permanently low interest rate. |
| minimum monthly payments on your credit cards, or | | | | Be aware there may be a 2 - 3% charge on the |
| your total credit card debt is increasing each month | | | | balance transfer. To ensure you don't slip back into |
| then debt consolidation may be the right choice. There | | | | debt cut up all your credit cards and close paid off |
| are a number of options when considering debt | | | | accounts. |
| consolidation: | | | | 10) Check all the options before making a decision. |
| 5) A mortgage or re mortgage | | | | As you research all the options it will quickly become |
| If you own your own home the lowest interest rates | | | | clear if there is one obvious solution. For many |
| are obtainable by taking out a new mortgage to pay | | | | individuals there will be more that one option so it is |
| off your existing mortgage (if any) plus enough funds | | | | essential check them all out before makuing a final |
| to repay you other debts. | | | | decision. Go to a range of different lenders and |
| If repaying your existing mortgage will result in penalty | | | | mortgage or loan brokers and obtain the best package |
| charges consider a 2nd mortgage with your existing | | | | for you. Remember you have the final say and just |
| lender. The interest charged will probably be slightly but | | | | enquiring does not commit you to any course of action. |
| not significantly higher. | | | | For a great many people debt consolidation provides |
| 6) Take out a secured loan with another lender | | | | an ideal solution to excessive credit card debt. Sorting |
| If you have already missed or been late with any | | | | out debt problems takes a little time, effort and |
| payments, and as a result your credit score is too low | | | | determination. Once you've sorted your debts you will |
| for your mortgagor, consider a secured loan with | | | | find life more enjoyable and relaxing and, with no debt |
| another lender. | | | | collectors calling or contacting you by post or phone, |
| Secured loans in these circumstances are more | | | | much less stressful. |
| expensive and the lenders are quick to repossess | | | | |