If you are looking to consolidate your debt then you might be thinking of ways to do this. Debt Consolidation means that you make one single reduced payment to multiple creditors.
One way to reduce your monthly outgoings is to get a debt consolidation loan. This loan will be used to repay your multiple unsecured creditors meaning that you are left with just one manageable monthly payment – your new debt consolidation loan.
Advantages of getting a debt consolidation loan are that you can often benefit from a lower interest rate than the one you are being offered on your current unsecured debt. As a Debt Consolidation Loan is usually secured against your home, lenders are more willing to offer a lower interest rate as they have a form of security should you miss payments.
However the biggest downside of a Debt Consolidation Loan is that it is secured against your assets, usually your home. If you are struggling to meet your repayments then you don’t really want to take out a further loan and risk your home being repossessed.
If you think that making the repayments to a loan will be a struggle or your outgoings are greater than your incomings, you might want to consider a debt management plan.
This type of debt consolidation can offer you a greatly reduced payment to your debts, and you will be able to consolidate your unsecured debts without having to take out a further loan.
A Debt Management Plan is an informal agreement with your creditors, and will reduce monthly outgoings which should in turn make it easier for you to afford your priority debt, such as utility bills. You won’t have to worry about dealing with any creditors calls or letters, as part of our ethical and professional service, One Advice will deal with this on your behalf.
We will help you arrange one reduced payment that you can realistically afford after we have deducted any living expenses or priority debts, such as your mortgage payment. As a Debt Management Plan is flexible you can change the amount that you pay to your creditors if your financial circumstances change.
We will work closely with your creditors on your behalf to agree this new repayment plan. Some creditors are often willing to freeze interest and charges on your account or offer you a lower interest rate.
If you think that a Debt Management Plan might be the perfect way for you to reduce your debt, or you are looking for other debt solutions then please get in touch. One Advice can offer you expert advice to help you find the perfect debt solution, whether it be a Debt Management Plan, IVA or Trust Deed.
Call One Advice today on freephone 0800 019 5870.