As the New Year kicks off to a great start, there’s no better time to take a fresh look at your finances than right now. Start off the year the right way by knowing precisely what your financial situation is and how you can improve on it.
Money.co.uk conducted a poll that uncovered some rather astounding statistics. According to the results, more than 50% of the British population (that’s almost 27 million people) have started this year in debt. The statistics also show that more than 5 million Britons owe more than £10,000 in credit.
If you would like to consolidate your debt without tying yourself into a long term, high interest, debt consolidation loan, you have come to the right place. You are about to learn about 3 alternative avenues you can take to consolidate your own debt.
3 Ways to Consolidate Your Debt all by yourself
Yip, there are ways to avoid the red tape and hassle that comes along with a dedicated debt consolidation loan. Keep in mind that when you have your debt professionally consolidated, a record of such is placed on your credit rating/history. During the consolidation period, which is typically 5 years or so, you will not be allowed to open any accounts, apply for any new credit, or get into any further debt. This is why so many people shy away from this particular option when looking for debt relief.
Below are 3 alternative ways to consolidate your debt.
- Slash savings and all other non-essential expenses.
You have probably heard advice on savings your whole life. People will have told you that savings should be considered one of your fixed expenses and you should never compromise on it. Well, while that is true, it is also important to look at crippling debt from the right perspective. If you keep saving money while you are struggling with debt, the interest on your debt will increase rapidly. Unfortunately, interest on savings accrues very slowly and won’t be worth it. When you are struggling under the burden of debt, saving money should take a back seat. You should try to use any extra money you have already saved to pay off the debt.
You also need to look at slashing the cost of any non-essentials in your life. If you go out for dinner often, stop doing that. If you smoke regularly, cut back or quit (it will be good for your budget and your health). There are many things you can exclude from your life, to make things a little easier.
- Apply for an unsecured long term loan for debt consolidation.
Now, a debt consolidation loan doesn’t have to come from a specific debt relief company or the high street bank. You can apply for an unsecured long term loan for debt consolidation that you can do yourself. This means that there is no record on your credit history and if your financial situation improves rapidly in the very near future, you can apply for credit and/or accounts as you wish. These loans make it possible for you to pay off all of your outstanding debt and then focus on repaying just one loan back each month (with a low interest rate attached).
Unsecured long-term loans can also be used to build a good credit history (by paying your loan repayments on time every time). These loans typically range from £1,000 to £20,000 and are also available to people who have a less than perfect credit score. To apply, you simply need to be older than 18 years of age, have a bank or building society account in your personal name, and be a resident of the United Kingdom for at least 3 years. Of course, you also need to prove that you can afford the monthly repayments.
- Approach a debt counselling charity for assistance.
If you are in dire straits and cannot afford the monthly instalments on a long term loan, you can consider approaching a debt counselling charity for assistance. An article in the Mirror details some advice on how debt counselling charities, such as Citizen’s Advice and National Debtline, provide helpful assistance in working through financial troubles. If you are interested in non-judgemental and workable solutions, they are worth your consideration.
When it comes to consolidating debt, most people mistakenly believe that the high street bank and professional debt consolidation/relief companies are their only option. There is still the option of consolidating your own debt by taking out an unsecured long term loan. This could save you money on interest and will definitely not have a negative impact on your credit history/rating. That’s certainly something worth considering, isn’t it?