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simply have taken on too many different bits and pieces of credit
that are now proving hard to cope with.
We have
a number of credit cards that were certainly useful during
the recession when our working hours were reduced When our
working hours were cut our salary was reduced.
These
cards helped us get by and enabled us to put food on the table
and pay our utility bills. Sometimes even our mortgage payment
was paid by credit card.
Now that
our salaries are as they were there is no longer any need
to use credit cards as a means of survival.
Credit
cards seldom have interest rates of less than 20% and are
sometimes as high as 40% or even more.
Trying
to pay these extortionate rates is financial suicide.
Having
one credit card is often handy and sometimes essential when
shopping online for our groceries as the super markets do
not accept Paypal but there is no longer any need for having
a number of cards with their almost criminal rates of interest.
Many people
are still paying the home improvement loan that they arranged
with the company that fitted their conservatory and new kitchen
just before the advent of the credit crunch when it all seemed
affordable.
With it's
interest rate of 25% this loan payment is also very high.
It is
time now to grab the bull by the horns and do something to
remedy the debts and pay out a lot less each month and this
is when debt consolidation comes into the equation.
Debt consolidation
combines all the outstanding debt into the one payment and
not only that there are great savings to be made at the same
time.
Therefore,
debt consolidation loans not only make money management easier
by granting one payment every month they also save money and
often a great deal of money at that.
Tenants
can always approach their own bank, and throw themselves at
the mercy of hopefully a friendly bank manager but that is
about the only option open to them, apart of course from debt
management
Homeowners
with equity in their property have other better choices, and
that is either by taking out a secured loan or a remortgage.
Both remortgages
and secured loans are forms of homeowner loans that release
equity in the property to raise funds that among other purposes
can be used for debt consolidation.
You are
always best to approach a whole of the market secured loan
or mortgage broker who has every remortgage and secured loan
product at his finger tips to obtain the most suitable option
for you with the lowest interest rate
applicable to your circumstances.
At the
moment secured loans are available from only about 9% APR
and remortgages start at from less than 2% for homeowners
with a maximum LTV of 60%
For those
with less equity than this the rates are still very favourable
whether a secured loan or a remortgage is the home loan of
choice.
To give
an example of just how much can be saved is that if someone
has credit cards totaling say 40,000 the minimum monthly payment
would be 1,200, and it would be twenty six years before the
cards are fully paid off.
A secured
loan for the same amount would cost in the region of 650 pounds
over a ten year period which is a saving of almost 50% monthly
and has a repayment period of ten years comparerd to twenty
six years.
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