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Many debt problems start with individuals struggling to manage a number of different creditors at once. Many find that having to make multiple payments to multiple creditors at multiple times of the month very confusing, which leads to missed payments and interest and charges being added.

Getting debt consolidation advice could help; instead of making multiple payments to different creditors, debt consolidation allows you to make one lower monthly payment which covers all your creditors. There are debt consolidation options which involve taking out a loan but a better option for you could be a debt management plan.

A debt management plan is designed for those who struggle to deal with multiple unsecured creditors and find they are struggling to make payments. A debt management plan allows you to consolidate these debts into a single monthly payment. So although you will be repaying your debt over a longer period of time, you have the peace of mind knowing exactly when and how much your monthly debt repayment will be.

Sometimes interest and charges can be frozen with your debt management plan, although this cannot be guaranteed.

If you like the idea of consolidating your debt but have high levels of unsecured debt (typically £15,000 and over), an IVA could be a better debt consolidation option for you. It is a legally binding contract between you and your creditors where you agree to repay what is affordable for a typical period of 60 months. On completion of the IVA, any unpaid debt is written off.

As you can see there are a number of debt consolidation options which do not require any further borrowing. But we would always advise that you seek professional debt consolidation advice so a debt solution can be found which is right for your circumstances.

For expert debt advice and for more information about your debt consolidation options, call One Advice today on 0800 048 1752.

If you are struggling with your debt, there are a number of debt solutions which you may consider. Alternatives to debt consolidation are something to consider as not everyone is suitable for a debt consolidation loan.

There are a number of debt solutions which require no further borrowing but still allow you to manage your debts with a lower monthly payment. The best way to understand what alternatives to debt consolidation are available is to get expert debt advice and One Advice can provide you with just that, call now for personalised debt help – 0800 048 1752.

The main advantage of a debt consolidation loan is that it makes your debt more manageable by reducing your debt repayments, as your new debt consolidation loan is designed to pay off your outstanding unsecured debts. It can also simplify your personal finances as you only have to make one payment to your unsecured debt per month. However, there are alternatives which allow you the same advantages without taking out another loan.

The most common alternatives to debt consolidation are:

• Debt Management Plan – A Debt Management Plan is an  informal agreement between you and your unsecured creditors where  you make one affordable payment to your debts. There is only one payment to make, to us, and we will distribute this fairly between your creditors so you don’t have to worry about multiple debt repayments throughout the month.
• Individual Voluntary Arrangement (IVA) - Like a Debt Management Plan, an IVA allows you to make a single reduced payment to your debts but offers additional benefits. You commit to repaying your debt over a typical 60 month period at a rate that is affordable to you. On completion of the IVA any unaffordable debt will be written off.
  It is important to note that an IVA is a formal, legally binding agreement between you and your creditors and to avoid bankruptcy you must commit to making the agreed repayments.

Remember that with dealing with your debts, there are alternatives to debt consolidation. For free help and advice about the range of  debt solutions available, call One Advice now on 0800 048 1752.

Often, when coming across a range of debt solutions, you may come across the benefit that they can all consolidate your debt. But what does debt consolidation really mean and what is the difference between consolidation loan, debt management and IVA?

People often believe that debt consolidation can only come in the form of a loan and only a debt consolidation loan can be used to consolidate your debts into one lower monthly payment. But this is not always the case, as ‘debt consolidation’ also refers to any type of consolidation which allows you to combine your monthly unsecured debt repayments into one lower payment. This should make it easier for you to manage your debts as you only have to make one payment per month instead of separate payments to different creditors.

So, when deciding upon a debt solution it is important that you fully understand the difference between a debt consolidation loan, debt management plan and an IVA. The following gives you a brief overview of these differences, but for personalised debt advice about which of these solutions is right for you, call One Advice now on 0800 048 1752.

Debt Consolidation Loan – A Debt Consolidation Loan is a new loan which is taken out in order to pay off existing debts.  Many people opt for a debt consolidation loan as they find it makes managing their unsecured debts much simpler and easier to manage.
A key advantage of a Debt Consolidation Loan is that you can often benefit from a reduced monthly payments but it is likely that you will be repaying these debts over a longer period of time. It is important to note that a Debt Consolidation Loan is often secured against your home, so never agree to a loan if you feel as though you will fall behind on your debt repayments as you could lose your home to repossession. Always seek expert advice about a Debt Consolidation Loan before you agree.

Remember that not every debt consolidation option means that you take out a new loan:

Debt Management Plan – A Debt Management Plan is an informal, flexible debt solution which allows you to make lower payments towards your unsecured debts. Your monthly payment will be based on only what is affordable to you after your income and expenditure has been taken into account. Therefore you will still be able to keep a  standard of living and make a lower monthly payment to us which we will distribute between your creditors.
It is worth noting that a debt management plan offers no amount of debt write off so you  will continue to make payments to the plan  until your debts are paid off in full.

Individual Voluntary Arrangement (IVA) – An IVA is a legally binding agreement between you and your creditors, where you agree to make a single reduced payment to your unsecured creditors over a typical 60 month period, after which any unpaid debt will be written off.
Like a Debt Management Plan, you will be making payments which are affordable to you after your outgoings have been considered.

This is just an overview of the difference between consolidation loan, debt management and IVA, and we would always recommend that you seek professional information before deciding upon any type of debt solution.

When you are struggling with debt, you may be thinking of ways in which you can pay off debt without a loan. Many people do go down the debt consolidation route but then find it a struggle to make this new loan payment when debt starts to build up on their consolidated credit cards once again. So how is it possible to pay off debt without a loan?

The first step is to make sure that you take expert debt advice. Talking to a professional about your debt means that you can benefit from their expert opinion and become more aware of the debt solutions which are on offer. If you are looking to tackle your debts but want to pay off debt without a loan, here are a number of ways which you could do that:

Cut your outgoings. Perhaps you are struggling to repay your debt because you are overspending in other areas. Working out your credit crunch luxuries and cutting back on these non-essentials really does mean that you could save a small fortune over the course of a month.

Think of places where your money regularly goes: takeaways, meals out, gym membership, nights out etc. Once you have identified the key areas where you spend the most money, this could make a big difference to your ability to repay your debts and manage to pay off debt without a loan.

If your outgoings are already cut back to the limit and you still find that your debt repayments are unaffordable, you need to see what debt solutions are on offer and how they can help you:

Debt Management Plan: This is an informal repayment agreement between you and your creditors where you agree to make smaller payments towards your debts over a longer period of time. Although it will take you longer to become debt free, your payments will be affordable to you.

Individual Voluntary Arrangement (IVA): An IVA is best suited to those with high levels of unsecured debt, typically over £12,000, and are struggling to repay their debts.
Like a debt management plan, you can take advantage of reduced monthly payments but with one big difference, an IVA is a legally binding contract and allows a certain amount of debt write off. You commit to making monthly payments towards your debts, based on how much you can afford after your other financial commitments have been accounted for over. On successful completion of the IVA, typically 60 months, any unpaid debt will be written off.

For further advice about how to pay off your debts, speak to one of our debt advice specialists on 0800 048 1752.

According to research by uSwitch, debt consolidation could save consumers £20 billion if they consolidated all of their unsecured debt, such as store cards and credit cards, into one low cost form of credit.

Brits currently pay out about £98 billion in loan interest each year, so it is no wonder that many of us are looking to consolidate debts to lower the amount of interest paid. Louise Bond, personal finance manager at uSwitch, comments: “It is vital that borrowers give themselves the best possible chance of servicing their debt in the most economical and manageable way possible.”

However, a debt consolidation loan is not suitable for everyone. The research also discovered that of the 1.3 million debt consolidation loans issued in 2008, over a quarter of the borrowers who did not close down existing debts went on to get themselves a further £2,221 in debt.

Debt Consolidation Alternatives:

The purpose of a debt consolidation loan is to reduce the amount that you are paying towards the other debts, so you only make one payment to cover all of your debt. But it is important that you try to avoid the vicious cycle of falling into more debt.

If you are looking to consolidate debt because you are struggling with your current debt repayments then there are debt consolidation loan alternatives which can reduce the monthly payment you need to make to your creditors without the need for any further borrowing.

Debt Management Plan – Like a debt consolidation loan, you will only have one payment to make to your creditors. We will negotiate with your creditors on your behalf and some are also willing to freeze additional interest and charges on your debt. Although it will take you longer to repay all of your debt, it should not be a struggle to meet the payments.

One Advice can help you with the debt consolidation alternatives – Call now for free debt advice.

The number of applications for a debt consolidation loan is expected to increase during the first six months of the year, according to research by Sainsbury’s Finance. They say that the need for personal loans always seems to be higher during this part of the year, in particular January where more of us look to deal with credit card debt which has built over the Christmas period.

Many of these personal loan applications could be to consolidate credit card debt, a debt consolidation loan can make it easier to manage personal finances. It is often easier to manage just have one new loan payment which will cover all of their previous creditors.

About the debt consolidation loan applications increase, Steven Baillie, head of loans at Sainsbury’s, said: “Debt-consolidation is always a good idea if you have multiple sources of debt, maybe a store card and credit card or a historical loan.”

Having multiple debts across multiple interest rates may make it very difficult for you to manage your finances in a well-ordered fashion, and you find yourself asking questions such as:

Which creditor should I pay first?
How come my debt repayments only cover my interest charges?
Have I repaid all my creditor commitments this month?
What about if I cannot afford the charges for missed payments?
Will I ever be debt free?

If you feel as though you are in a financial whirlwind, you don’t need to panic. There are ways that you could consolidate your debts so you reduce your monthly outgoings and only have to make one debt payment each month.

This type of debt plan for quick and easy consolidation could come in the form of a debt consolidation loan. The loan, normally secured against your home, should allow you a lower interest rate and you use it to pay off all your smaller creditors.

Debt Plan for Quick and Easy Consolidation:

Consolidating your debt can help you on the road to gaining control over your finances. Ensure that your debt consolidation loan works for you by following our consolidation help:

1: Know your debt levels.
Make a list your current debts and work out how much you of a loan you need to debt.

Many people find it easier to use the debt consolidation loan to clear all of their debts so that they don’t have continuing worry about multiple creditor payments. But maybe you won’t get accepted for the full debt amount? If not then clear off the debts with the highest balance and the highest interest rates first. Low level debts should be easier for you to pay off.

2: Know your spending habits.
Knowing your spending habits could be the most important factor in making the debt consolidation loan work for you. You have to resist the temptation to run up further debt on the credit cards, store cards or overdraft that you consolidated.

Becoming debt free is not easy and it is very unlikely to happen over night. So it is essential that you are committed to your future being free from debt, and this means that you may need to cut back on your spending habits to achieve this.

3: You don’t have to get into more debt to consolidate debt.
Getting accepted for a loan if you have missed payments to your creditors is not easy, and you may find that your debt consolidation loan has been turned down by multiple lenders– but this does not mean that you have to give up on the thought of consolidating your debt!

There are ways to consolidate debt without the need for a loan if you are struggling with your debts. This is known as a debt management plan and it is an informal agreement with your creditors which allows you to reduce your monthly payments. Although it will probably take you longer to clear your total debt, knowing that your debt repayments are affordable to you on a monthly basis can relieve any stress and worry you have about your debts being unaffordable.

If your debts are spiralling out of control and you feel as though you cannot afford to make minimum payments to your creditors, it can sometimes seem that consolidating your debts makes sense. Debt Consolidation allows you to make a single lower payment to your creditors, as you effectively pay off your debts so you are left with just one creditor. But the question is, does debt consolidation work?

According to research published by Moneysupermarket, almost two-thirds of those who take out a loan to consolidate their debts continue to borrow more during the lifetime of the loan.

It seems that consolidating debt is not just a one-time occurance, as almost half (44%) of those questioned said that they would consider consolidating their debt again, showing that even those who have the best intentions of clearing their debt are finding that getting into debt is unavoidable. (more…)

Checking your credit file could be the difference between getting accepted or rejected for credit or a debt consolidation loan. Many people are looking towards getting accepted for a loan in order to achieve debt consolidation, but as many as one in six credit files contain potentially damaging errors, according to Which?.

Lenders use credit files to help them determine if they should offer credit and at what interest rate. Therefore these errors may lead to people getting turned down for a loan at an lower interest rate or being completely rejected for a loan. Errors which may occur on your credit file include incorrect personal details or evidence of fraud.

There are a number of ways in which you could minimise the risk of being rejected for a debt consolidation loan. Check your credit file first to ensure that the details listed are correct, and try to look for ways for potentially improving your credit rating, such as making payments to your credit card debts on time.

Martyn Saville at Which? said: “Checking that your credit files are up to date and accurate before you apply for a mortgage or a loan could improve your chances and ensure that you don’t end up out of pocket because of an error.”

If you think that you are struggling with your level of unsecured debt then you might be thinking about some form of debt reduction. Consolidation of your debt could help you to reduce your monthly payments to your creditors and, with a secured debt consolidation loan, you could find that you reduce your overall interest rate.

Debt Consolidation Loans have helped people put their finances back on track, especially if you are looking for monthly payments to be reduced in order to achieve debt reduction. Consolidation means that you are combining your unsecured debt, such as unsecured loans, overdrafts, credit cards and store card debt, into one single loan.

But you may need to think carefully about this type of debt reduction service. Consolidation usually comes in the form of a debt consolidation loan. This often means that the debt will be secured against your home and failure to make the payments to your debt could lead to the risk of repossession. (more…)

Store cards can seem so tempting at the time; you are at the till with an item you can’t really afford to buy and then the magical cashier offers you a way to not pay with ‘real money’ as well as get a discount on your must-have-item. But before you sign on the dotted line, stop and think about the unnecessary costs a store card might have.

The average store card comes with a hefty interest rate of 26% and with a quarter of British consumers becoming slave to store card debt, it is important that you take action now.

However, if you are struggling with store card debt then there are things that you can do about it. According to Alliance and Leicester’s personal loans manager, Mark Boyle, you might benefit from better debt management with a debt consolidation loan.

Boyle comments: “Summer is as good a time as any to sit down and reassess your finances. Whether you are saving for a family holiday, or to free up some cash to make home improvements, it is good to take stock of outstanding debts. For those who wish to make their debt easier to manage, taking out a personal loan and consolidating it into one easy-to-manage chunk may be a wise option.”

If you are struggling with store card debt, it can be a good idea to consolidate your debts into one payment. However, a debt consolidation loan is usually secured against your home which means that you need to ensure you can afford to make the new payments to your loan or your home may be at risk.

But there are other ways that you can consolidate your debt without having to take on further borrowing. One Advice can offer you free debt advice and information about a wide range of debt solutions. A debt management plan can reduce your monthly payment to your unsecured debt.

To see which debt solution is right for you and for more debt advice about how to consolidate your store card debt, please take the 1 Minute Debt Test.