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Loans Are Not Just For Christmas. Surviving The Holiday Debt Hangover.

Loans Are Not Just For Christmas. Surviving The Holiday Debt Hangover.

Christmas is coming - A time for decorations, songs, over-eating, gift giving, visiting the family, consumer spending and the increasing of personal debts. Bah humbug.

While most people see Christmas as a joyful period there are many who see it as a time of financial worry as they cannot afford to buy presents for everyone. For these people it is often the doorstep lenders who will be getting fatter rather than them and their family. The temptation is to simply put the expenses on the credit card or take out a loan to be paid back on the never-never. Unfortunately this can lead to disastrous results in the long-term, as the recent increase in the number of repossession order applications are testimony.

There are a few simple rules can help to prevent a post festive period financial hangover though.

Firstly, don’t ignore the problem. The longer you leave a debt problem, the worse it will become.

If things seem desperate then contacting a free organisation such as National Debtline (0808 808 4000) can help by giving debt advice over the phone, or by providing booklets and fact sheets, as well as helping to set up personalised debt management plans.

Next, maximise incomings and minimise outgoing expenditures. Look out for anywhere costs can be reduced. Online retailers don’t have to pay for expensive premises, and so buying presents online rather than in the shops is often a great money saver. Be alert for shop sales and make the most of them.

If you already have debts, then you need to be wary of borrowing more money without some serious consideration and qualified professional independent financial advice.

Taking out a low rate secured loan to cover previously unsecured debt may seem like a sensible idea, however, should you fail to meet the payments you could lose your house. If you have unsecured loans, your home may not be safe either. Debt counselling charities have recently become increasingly alarmed regarding a growing trend by some of the high street lenders to issue “charging orders” on borrowers’ homes in order to recover bad debts. This means that by going through the courts, the lender can change an unsecured loan agreement converting the debt to be secured on the borrower’s house, whilst still charging unsecured interest rates. A consolidation loan may seem sensible; however this will mean borrowing more money, over a longer period this will mean more interest to pay in the long run.

If you decide to take out a loan, then you need to ensure that you are getting the best rate that is available. Radio 4's Money Box recently highlighted the plight of people in Southampton where the typical doorstep lender’s APR was a massive 177%. For people on low incomes trying to regain control of their finances, this will lead to further problems and cause existing debt to spiral out of all control. Recent initiatives for people who have had problems getting affordable credit, known as Community Development Finance Institutions (CDFIs), have started springing up around the country. These are funded by a collaboration of public and private money including some of the major banks, and specialise in providing personal adverse loans and small business loans to people who have previously been turned down by the banks. CDFIs usually charge an annual interest rate of up 24%, which is higher than many standard non-adverse high street loans due to the increased levels of risk and additional advice involved with this kind of lending but it is also much lower than the unregulated alternatives.

When you look at paying off existing debts, you need to decide which are the most important and deal with your priority debts first. Ensure mortgage and rent bills are covered first, next pay off essential utility bills and council tax, before trying to pay off any unsecured loans.

As well as reducing any monetary outgoings, it is also important to ensure that you are getting all the incoming money that you are due. Checking with the local Citizens Advice can be useful for help on debt, benefit, housing, legal, discrimination, employment, immigration and consumer issues. They will be able to advise you on most areas of concern, including whether there are any government payments to which you could be entitled.

Debt problems can seem insurmountable at the best of times, but over the Christmas period it can become completely overwhelming. Start by maximising your incomings, minimising your outgoings, and careful budgeting and purchasing. Ensure you are getting the best loan rates through free online information comparison at sites like Moneynet, and speak to free independent advice services like National Debtline and Citizens Advice; it is possible to retake control of your finances and have a happy Christmas.


All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.

You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

Make An Escape From Debts Through Unsecured Consolidation Loans

Make An Escape From Debts Through Unsecured Consolidation Loans

If you are carrying ample of debts on your shoulders, you can be in great trouble. Multiple debts jeopardize your credit standing and may frame you as a bad debtor. Dealing with various creditors at the same time is a stigma in itself. Their humiliating calls may not let you sleep. I too was in a similar condition a few months back. Until one day a friend advised me to opt for unsecured consolidation loans and put an end to my miseries.

Unsecured consolidation loans are designed for individuals who are getting buried under the burden of debts. These loans consolidate multiple debts into one easily manageable loan making you liable to a single creditor.

Unsecured consolidation loans are not tied to collateral and hence they come with a higher rate of interest. The benefit attached here is that the borrower is free from the risk of property repossession. These are ideal for tenants.

Through unsecured consolidation loans, the borrower gets rid of all kinds of debts such as credit card bills, medical bills, house rent, electricity bills etc. He is not required to make the repayment in a lump sum. Rather, he is facilitated to repay the loan in the form of monthly installments.

The credit score of the borrower plays a vital role in getting unsecured consolidation loans approved. As rated by FICO credit score of 850 is considered as the best and a score of 600 and below is regarded as poor. Taking measures for improving the credit score will qualify you to get better rates from the lenders.

If you have a poor credit history, you can still qualify for unsecured consolidation loans. Bad credit in the past haunts your present credit score. Therefore, before applying for the loan get your credit report updated from a credit rating agency. Any unsolicited debts in the credit report should be immediately removed. This will help the borrower to get favorable rates.

Several banks and financial institutions are trading in unsecured consolidation loans.The borrower may face many hurdles while approaching such physical lenders. There can also be an apprehension of loan refusal. In such a situation, online lenders will be helpful. Most of the loan providing agencies have their proposed websites supporting online application. The borrower can collect quotes from various lenders and compare them on the basis of loan term, loan amount and rate of interest. Online lenders have a propensity to provide the best possible deal to the borrower according to his financial status and repayment capacity. Using the online loan calculator will give you an estimate of the monthly installments and help you decide whether you can actually afford the loan or not.

Take control of your tormenting debts. Unsecured Consolidation Loans help you club multiple debts under one loan.Getting into debts can be a bed of thorns. So it is advisable to keep a check on your expenses and not let them overflow.