Money is an awkward subject in the UK, most people don’t like to talk about it and even less want to talk about it if they’re in any debt. Debt has a huge stigma attached to it even though there is such a thing as good debt; things like mortgages, contract mobile phones and having a credit card for sensible use. It’s when that sensible use becomes silly that we have a problem. Dealing with your debt is something you have to face up to at some point and the first step is to realise you need help.
Help for debt comes in many different forms and choosing the right one for you can take time. Each method has it’s pros and cons as well as certain criteria you might have to meet.
Borrow From Friends Or Family
Borrowing from friends or family is a simple and normally interest free way of getting rid of your debt – so long as they can afford it to help you. Borrowing money from loved ones can sometimes cause more problems though, as if they start to struggle they might put pressure on you to repay what you own sooner than agreed. Only ever borrow from family/friends if you have a really good relationship to start with.
Borrowing from another lender in the form of a consolidation loan is a quick and easy way to reduce multiple debts into one monthly payment. This is a great way of dealing with multiple debts and there are many lenders on the market; from high street banks to specialist lenders. Upside to this kind of debt consolidation is that everything becomes manageable but it might take longer to clear off and you will be paying back more than you borrowed due to interest rates – but this might be a saving if you’re paying interest elsewhere. You will still need a fairly good credit rating for a consolidation loan, for more lenders.
Use A Debt Management Company
A debt management company will help you sort everything out, they will look at your debts, look at your income and outgoings then devise a plan of action. Helping you pay what you can afford to pay as well as negotiating a freeze on interest. They do all the work for you. Only ever use a free company such as Payplan when thinking about using a DMC – many charge you which adds unnecessary costs to your final total.
The Citizens Advice Bureaux will happily talk to you with regards to what help is available, they’ll go through your debts as well as your income and outgoings to offer you advice on how to reduce and clear them off. They will also help you to negotiate freezing interest rates and offering a smaller monthly amount to your creditors – much in the same way a debt management company will but you have to do all the leg work.
Whichever option you go with you have to first realise that you have a debt problem. If you’re struggling to pay all your bills then, yes, there is a problem. Don’t wait for a small problem to snowball into a larger one – talk to someone about sorting your finances out.