|  You’ve
probably scoffed at the cheesy adverts
on TV telling you how taking out a debt
consolidation loan can give you financial
freedom. However, if you do have debt,
a consolidation loan could actually
save you money.
Here
we explain how a debt consolidation
loan works and how it can be beneficial
to the millions of people who are paying
high interest credit on credit cards,
store cards, bank overdrafts etc.
So
how exactly does a debt consolidation
loan work? Basically, it is a loan where
all your existing debts are lumped together
and paid off, leaving you with just
one debt and with just one monthly repayment.
Many
people look to consolidate their debts
as - if it is done properly - you are
left with lower interest charges and
lower monthly payments. This is because
you are looking for a consolidation
loan which will reduce the amount of
interest you are currently being charged.
And
by paying lower interest charges, you’ll
also be saving money in the short term
as well as having one manageable monthly
outgoing as opposed to a myriad of monthly
demands. Even this in itself can have
a physiological benefit - looking at
your bank account and seeing just one
payment going out every month instead
of a hotchpotch of debt, can give you
a better perspective when dealing with
your finances (and your budget).
To
see if a debt consolidation loan could
lower your monthly debt repayments,
tot up all your existing debts (such
as monies outstanding on your credit
cards, overdraft, existing loans, store
cards etc). Then also make a note of
the total amount you need to repay every
month to service these debts.
Visit
our free Loan
Calculator at the foot
of our home
page and enter in the amount
of debt you currently have, selecting
how long you’d like to repay the
loan for. A monthly repayment figure
will then be displayed – compare
this to your current monthly repayments
and you’ll have a good idea as
to whether a debt consolidation loan
could be right for your circumstances.
If
you do decide to go ahead and take out
a debt consolidation loan, however,
be aware that while it can be the answer
to your finance nightmares, if you blindly
go ahead and consolidate your debts
without firstly understanding how you
got into debt in the first place, in
the long term, you will find yourself
in even more financial difficulty.
So,
take a realistic look at how you got
into debt (eg are you living beyond
your means?) and use the exercise as
a never-to-be-repeated-again learning
experience. And, most importantly, if
you are looking to consolidate your
debts, you should realise that a consolidation
loan does not clear your debt, it simply
moves all debts into a simpler repayment
vehicle and it is not an excuse to go
out and blow the lot!
|
When going out for a family meal, do consider restaurants
that have buffets. In many cases, the
prices are excellent value and a parent
can share with a small child. In addition,
many buffets are “all you can
eat” and of course, there is something
for everyone.
If you –
or your child – has a Wedding
Day coming up no doubt it has probably
had a negative effect on your bank balance.
And with research showing that the average
wedding now costs around £14,000
(the equivalent of a 10% deposit on
a £140,000 home) many couples
are starting married life with an unnecessarily
huge debt around their necks.