Article - Personal debt consolidation

To be amidst a flurry of bills, interacting with a number of lenders and keeping track of a whole bunch of repayments is not a bad financial state to be in – but in the fast paced life of today, such a situation is quite easy to find. The latest and high performance PC that you bought last month and the credit card payment you slipped to pay last month which added a load to the overdue and the various medical and electricity bills that you picked from the mail last night suddenly begin to acquire a lot of your mental space. And you do not find time to think about the assignment on your job that was to be submitted the week before and the important presentation that you are supposed to deliver to the business head tomorrow.

The details may be different but if the state of affairs surrounding you in the last couple of months sound even remotely like the one above, it is time to think about consolidating your debts and planning your finances better. You many simply be paying more than you should be paying and you are certainly wasting a lot of your mental energy interacting with lenders with whom you should not be interacting at all. Let us consider personal debt consolidation in a bit detail.

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All of us land in debts and come to be surrounded by loans at some point or other in our lives. The terms under which we sought these loans and the rates of interest that we pay for them today may be very different from our financial state, repayment capacity and the market conditions today. Also, some things like the credit card bills if overdue for a couple of months charge a significantly higher rate of interest than some other long term loan option would. You might not be in a state to pay off this plethora of bills and dues due to your current financial state but you are certain that this situation would not prevail for long – your business might be just picking up or you may be due a significant hike in your job paycheck.

In such a scenario, you might consider a long term loan, which settles your current dues and plugs all the multiple points of exit of your money into a single packet and gives you the much needed mental rest. This is known as a personal debt consolidation option. You may consolidate any kind of debt or loan or bill and get one single loan for repayment of all these and maybe with some extra money to pull you out of an emergency against a single debt consolidation loan.

Personal debt consolidation loans are available both in a secured or unsecured form. Secured loans can be obtained at very low rates of interest such as 8-9% and they are given against a collateral such as a house or some other piece of property. But more often than not, you might require an unsecured personal debt consolidation loan. In such a case, the interest rate would depend on the past credit history of the borrower, the current financial and job status and the expected repayment capacity. It also slightly depends upon the period for which the loan is sought and the amount in question. Fundamentally, it depends on the kind of comfort your lender has in your repayment capability.

Normally, debt consolidation personal loans are available for amount ranging from £10,000 - £100,000 or even more – depending upon the kind of debt the individual is under. In case of secured loans, it depends upon the equity in the property being placed as the collateral. Such loans can be available for any period of time but normally the lenders expect full repayment within 10 years.

The changing financial scenario of the UK has made obtaining personal debt consolidation loans very easy. It is better to sum up all your bills and loans under one consolidated loan and pay a cumulative lower rate of interest, thereby securing your peace of mind than to keep paying multiple debts and bills which make financial planning very tough. This is a very viable option to go for those who do not wish to keep tracking a million bills and if planned with dexterity, it may get you out of any financial mess you are in with the repayments at your chosen time rather than on demand of your numerous lenders.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS
ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

A fee between 0% and 10% of the loan may be charged on some
plans depending on credit history and ability to prove income.
Example: Loan of £15,000: 120 monthly repayments of
£204.66, 10.4%APR variable. Loans secured on residential property.


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