Get Debt Management Plans From Debt Management CompaniesDebt Management Companies Uk Advice and Help

It is quite common for the people to have debts and in the United Kingdom large numbers of people are facing this problem due to various reasons. A debt management service can help such people in getting rid of their debts in an easy and quick way. If you are reeling under multiple debts and also have much lesser income than those debts, then a reputable and professional debt management service in the UK can assist you in coming out of all your debts in an efficient way.

This service is available to the citizens of the United Kingdom and there are no upfront fees for availing it. Here you will find many seasoned financial experts who are eager to solve all your debt problems. They will suggest you of ways to successfully manage all your debt and clear it using your current sources of income. They will also inform you of ways to consolidate all your debts at much lower interest rates.

How a UK debt management can help you?

A debt management service will first analyze your sources of income to estimate the amount of money that you can repay each month apart from your recurring household expenses. Aside from this, they will also analyze all your outstanding debts, their interest rates and the repayment period. With all this crucial data in their hands, a debt management service then decides on which of the loan needs to be cleared first (For example: debts with the high interest rates and the smaller repayment period)

If you have numerous small loans with the higher interest rates, then they will suggest you to go for a debt consolidation loan at a low rate of interest. In this process, all your outstanding loans with the high interest rates are combined into one single loan at a low interest rate.

The debt counselors in a debt management service are suitably trained for providing you with the tailor made solutions. They will also inform you of the merits and demerits of each of the solution. With their help, you can definitely get rid of all your debits in an methodological way. Sometimes, it is also possible to make a lump sum payment to the debt management firm, who then distributes this amount to all your creditors.

So you are thinking what does debt consolidation and payday loans have in common? Well typically people who opt for payday loans are not very far from those who are currently considering debt consolidation as an effort to lower high interest credit card monthly payments. We live in a country where credit is relatively easy. In fact on any given day, most of you will receive a letter from a credit card company offering you the world but spelling out the harsh details in the fine print that unfortunately few ever take time to read. This article is not meant to pit debt consolidation and payday loans as good vs. evil.

It is intended to help you understand why people chose both alternatives. First of all, what exactly is debt consolidation? Debt Consolidation is the process of aggregating unsecured debt in order to lower overall interest rate and have one monthly payment. Who needs debt consolidation? If you are stuck with high interest monthly payments, especially from credit card debt, it is likely that debt consolidation would be appealing. In many cases people simply can not afford to pay what they are currently paying.

Keep this in mind. Lets transition to payday loans or cash advance. People that want a cash advance are those who are in a bind and need emergency cash. Payday loans and cash advance have high interest rates and many states prohibit them. I am not against them because I understand why people may need them as a last resort. In both insistences people are seeking debt relief; however, those solutions are not the ultimate solutions to the problems they try to solve. The true answer lies in our ability to spend vs. save.

The best debt consolidation program will get you out of debt if you finish the program; however, to fix the problem you must understand that living within your means is the true solution. A cash advance may help you pay for a bill when you come up short, but saving for a raining day is a lot cheaper than getting a payday loan. By acknowledging our own weakness, we can become stronger when we take action to improve ourselves.

The purpose of debt consolidation is to pay only one loan. Many individuals are faced with the problems of paying many loans. There might be student loans, home loans, personal loans or even credit card payments. When it comes to all of these, there will be confusion about which one to pay and when to pay it.

Not only will the interest rates vary from bank to bank, the payment options as well as the time of the payment will also vary. To sort out this problem, a debt consolidation is sought. Through this method, the borrower may pool in all his debts, and take a fresh loan against some security. This method is normally sought to seek lower interest rates, and also to make sure the interest rate is fixed.

In most cases the collateral taken for this loan is a house. If there is no security, there are chances that the interest rate may be higher. So it is wiser to set the loan against some security. Many individuals who seek these loans will want to pay back certain credit card loans, as the interest on those will be higher than most loans.

The option of debt consolidation will also have to be thought of carefully by the person going in for such a loan. If he is doing this because he prefers this to declaring bankruptcy, there will be the debts to consider. He will have to pay back all the debts. It is sometimes better to choose this option, as it will allow the person more chances of maintaining his credit record, and it will be good for further use.

Debt consolidation is also used against property, as this will give the lender assurance that he is safe even if his loan is not returned. This is the only reason for him to reduce the loan interest rates. The borrower should also be smart enough to look around for several lenders, and check all their interest rates, before picking one lender.

The borrower must also not hesitate to ask if there are any various options that he can choose from. Some companies may indulge in forcing the borrower to refinance the loan, and get into a situation where he is unable to come out of it. So before applying for the loan, the borrower should also check the credentials of the company.

Debt consolidation also means that the unsecured loans are all becoming secure loans. This will mean that the borrower risks the chances of losing his property if he is not paying back on time. Though in this debt, the borrower needs to pay only monthly installments, the entire amount including the interest may calculate to a much higher amount.

Some companies also offer the options of offering debt consolidation loans, without it being secured. This option will also have to be looked into by the borrower. And he must seek the advice of a financial consultant before moving forward.

Debt consolidation comes into play right after you realize that you are in an urgent need for money because you are deep in debt and interest rates, and the premiums you pay on your loans are no longer affordable. So in case you feel that your current loans are no longer manageable and can easily result in bankruptcy, it’s high time that you considered borrowing money for consolidating debts. At best, unpaid debts can have a strong impact on your credit history and result in poor credit report; and as a last resort, you can lose your property. However, it makes no difference how appealing debt consolidation loan can be, you should realize that this is nothing else but one more debt and if you obtain it unconsciously, it can lead you to even more serious financial problems such as bankruptcy.

The main idea of debt consolidation loans is to combine all the debts in one manageable loan, one interest rate and APR (annual percentage rate) for one simple reason - paying off this very loan as soon as possible. Basically, such option as consolidation of loans is available to all borrowers irrespective of credit score and status but still you should remember that poor credit leads to much higher rates and more difficulties with applying and getting approved for this type of loans. All loans designed for consolidating debts are broadly divided into two categories: secured and unsecured loans. Secured loans require putting any valuable property against the loan as a collateral. Unsecured loans, in their turn, do not require any security but result in much higher rates and less beneficial conditions. You choice should depend on your needs, your budget and your expectations. In case you hesitate whether to choose secured or unsecured loan, it’s advised not to tempt the fate and consult with a qualified professional on this matter.

Debt consolidation loans, as well as all the rest of loans available in the market today, have their benefits and drawbacks, so you are to be well-aware of them before you take a decisive step and consolidate your debts.

In particular, the benefits are as follows:

1) Lower interest rates and monthly payments. It’s useless to doubt that this benefit is not the major one because this is actually what all debt consolidation process is about.

2) One loan and one lender. You don’t need to negotiate with many lenders every time you need to settle this or that issue regarding one of your loans. Debt consolidation loan means having one arranged loan and dealing with one lender you choose consciously.

3) Credit history improvement. Timely and regular payments will definitely improve your credit score and prove your paying capacity.

As for the drawbacks, you should consider these:

1) Higher overall cost. There are companies which conceal high additional fees you are to pay for the debt consolidation loan with low rates in order to attract the clients.

2) Property loss. If you fail to pay this consolidation loan, you can lose your property for all.

3)  Scams. Since debt consolidation loans are highly demanded, there are quite many scams. Do proper research and consult specialists before you obtain debt consolidation loan and never trust offers which sound too good to be true.

Step 4 - Reducing Your Interest

If you have read the previous articles, so far you have learned how wide spread of a problem debt is, the true impact it can have on your life, and how to determine exactly how much debt you have and how much it will actually cost you. The next step is to attempt to reduce your interest rate. There are several ways you can accomplish this.

We’ll start by looking at what are typically known as the highest-interest debt, credit cards. Believe it or not, one of the easiest ways to do this is to simply call your credit card issuer and ask them to reduce your rate. This sounds laughable at first, but quite often it actually works. Credit card issuers typically charge customers much higher interest rates for the money they loan than what they pay to borrow it from others. This leads to huge profit margins, which means they really want to keep you as a customer, especially if you regularly pay your bill on time. They know you have plenty of options available, and are likely to switch to another credit card issuer if you feel you can get a better deal, so they’re happy to make a slightly smaller profit and keep you as a customer by lowering your rate.

If that doesn’t work, a second option is to find a lower-rate credit card and roll your balance over to it. You may be tempted to go with a card that has a 0% introductory rate. This is probably not your best option though, unless you plan on paying off the card within six months. What you want to look for is a card with a low permanent rate. There are several sites available to where you can compare credit cards from multiple issuers such as Creditor Web, http:www.creditorweb.com.

There are also several broader options available for credit cards and other types of debt. One of which is to look into refinancing any loans you have. Interest rates go up and down over time, and it’s quite possible the rate you can get now is lower than what it was at the time you originally financed the loans. Often there will be a refinancing fee involved, so use the amortization calculator from the previous article to make sure the amount you are going to save is greater than the amount you will have to pay.

You can also get a debt consolidation loan. You need to be careful when considering this option though, because although there are several legitimate companies offering debt consolidation loans, there are also several companies trying to make a quick buck at the expense of others. I highly recommend checking out any company you consider getting a loan through with the Better Business Bureau, especially if it’s not a reputable bank you are familiar with. In addition, once again use the amortization calculator to make sure you are actually saving money with the loan. Just because your monthly payments are lower doesn’t mean you’re saving money. £300 per month for 10 years is going to cost you more than £500 a month for 5 years.

The last option I want to suggest is for those of you who own a home. There are actually two options here, you can take out a second mortgage, or refinance your home for its current value and some additional funds, to pay off other debt. As with the one before, this can be both good and bad. It can be good because these loans typically offer the lowest interest rate because they are relatively safe loans for banks. That is also the same reason they are bad; if you do not pay them off, the bank can repossess your house. The other built-in benefit is by refinancing, you can often get a lower interest rate on your house, which can save you a bundle. As with the previous option, there’s often a refinancing fee, so use the amortization calculator, http:www.destroydebt.comcalculatorsAmortizationCalculatorJs.aspx to make sure you are saving money by doing this.

With all of these methods let me stress that you should be very careful not to fall into the same trap many others have. Too often families will take out a second mortgage or debt consolidation loan to pay off their credit cards, but instead of using this is a means to reduce their debt, they charge up all the credit cards again and end up in a worse situation than they were before. Don’t let this happen to you. Once you have refinanced to eliminate any credit card debt, close those accounts. Just keep one open for emergency use only until you get to a later step in this guide where you can destroy that one, as well.

Credit cards have proven to be a great help to the holders of the credit cards. These cards have provided many benefits to the population all over the world. However, things can still go wrong sometimes even with credit cards. That is why it is recommended that one should consider the option of credit card debt consolidation. This option of credit card debt consolidation seeks to eliminate all the possible risks attached with the credit cards and its usage.

Things that can possibly go wrong with the credit cards are:

•The credit card holders can over spend with credit cards and therefore, have to take the overdraft facility.

•In case the overdraft facility is taken it brings about payments of fines and interest on the amount taken as over draft. And the fines and penalties are not that small; they are relatively higher and only a select few can handle them in a manner that they ought to be.

•With credit cards from more than one bank, it can become awkward and difficult to keep track of each. This can build up debt and lead to many problems.

This small problem can bring about many serious repercussions to the holders of the credit cards. The saying “small holes sinking big ships” can certainly be applied over here.

To prevent these kinds of happenings, what experts advise is to take credit card debt consolidation. What this will do is that it will cover all what you owe to the banks with a single loan and now the borrower of the loan just has to cater to the loan and not the credit card borrowings. The other benefits of this credit card debt consolidation are that there are no fines and penalties to payoff, a borrower has same loan options that any other loan borrower may have. Also the interest rate of the loan would be either lower or at best in accordance with the rate at which the credit card overdraft had to be paid.

Another thing about credit card debt consolidation that is good is that they can be taken even when the holder is in good condition as the loan would be only of a lower interest rate. In addition, any one can take the credit card debt consolidation, be it a person with good credit history or with a bad credit one.

Applying for the credit card debt consolidation loan is pretty much similar to the approach that one requires to apply for any other loan. The difference may be in the terms that are offered with the loan. So for people with credit cards, there is some serious food for thought regarding your credit cards. Things can only get better with credit card debt consolidation.

So you are thinking what does debt consolidation and payday loans have in common? Well typically people who opt for payday loans are not very far from those who are currently considering debt consolidation as an effort to lower high interest credit card monthly payments. We live in a country where credit is relatively easy. In fact on any given day, most of you will receive a letter from a credit card company offering you the world but spelling out the harsh details in the fine print that unfortunately few ever take time to read. This article is not meant to pit debt consolidation and payday loans as good vs. evil.

It is intended to help you understand why people chose both alternatives. First of all, what exactly is debt consolidation? Debt Consolidation is the process of aggregating unsecured debt in order to lower overall interest rate and have one monthly payment. Who needs debt consolidation? If you are stuck with high interest monthly payments, especially from credit card debt, it is likely that debt consolidation would be appealing. In many cases people simply can not afford to pay what they are currently paying.

Keep this in mind. Lets transition to payday loans or cash advance. People that want a cash advance are those who are in a bind and need emergency cash. Payday loans and cash advance have high interest rates and many states prohibit them. I am not against them because I understand why people may need them as a last resort. In both insistences people are seeking debt relief; however, those solutions are not the ultimate solutions to the problems they try to solve. The true answer lies in our ability to spend vs. save.

The best debt consolidation program will get you out of debt if you finish the program; however, to fix the problem you must understand that living within your means is the true solution. A cash advance may help you pay for a bill when you come up short, but saving for a raining day is a lot cheaper than getting a payday loan. By acknowledging our own weakness, we can become stronger when we take action to improve ourselves.

The first principle towards settling your debt and moving towards a debt-free existence is in prioritizing your debt. What you must hold on for now to and what you must clear immediately is the first step towards debt management. A good debt management and prioritization of you loans settlement will get you out of debt. This article will give you some information guide on your debt management.

Which loans to prioritize?

Logically, the one with the highest rate of interest is the one that should be cleared quickly.

Two types of loans that should be cleared as soon as possible are personal loans and credit card loans.

The interest rate on these loans is the highest. On credit cards, it amounts to around 24% per annum (at 2% per month). A personal loan should be around 18% onwards. Even if you get the personal loan at a discount, it would be around 14% per annum.

Which loans can be serviced over time?

In your debt management process, there are loans which you need to prioritize to pay them off first, but there are loans which you could service them over time to reduce your loan repayment burdens. These loans can be serviced over time:

1. Loans with low or no interest rate
2. Loans with tax benefits

Home loans and education loan offer tax benefits and can be settled over time. Same for loans to family or friends, which are either interest-free or carry a low rate of interest.
The loans which you can close now

If you are in the bad debt situation, it is critical for you to close as much of loans as possible in the short period of time. Look at your asset list and see whether you have loan on these assets. For instance, you take a car loan for an asset - which is the car. In such a case, you can sell the car and close the loan.

If you are really struggling to pay your home loan, shifting to a smaller home or more economic location is solution for it.

Switch to Other Loans

As you know credit card interest rate is high and you might not able to clear it in short period of time; then, look for an alternative and switch it to a financier who will charge you a lower rate of interest.

For credit card, there is service call balance transfer. Say you are paying 2% or 2.25% per month on your card. You can go in for another credit card. They will pay back the bank and transfer your loan onto the new card. For the first six months, they will give you a lower interest rate. Say 1.5% or 1.75% per month. This lower rate of interest will help you pay back more.

For home loan, there are home loan packages which offer a very loan interest rate in the first 3 to 5 years; some even offer 0% interest rates in first 1-2 years. Take up these benefits by refinancing your home loan.

Summary

Almost all people have debt in somehow or rather and debt is the worst poverty. Being in debt is bad enough and not managing it well is worse. Know your debt and manage it property and you will get out from debt one day.

Debt consolidation programs are good if you are paying on several different loans. They can make your life easier by giving you one monthly payment. Your monthly debt decreases if the program you use for debt consolidation stretches your payments over a long period of time.  Paying less every month will free up some extra cash.
A successful strategy sometimes is to use a debt consolidation program. With these programs you can manage various high-rate revolving debts with one payment. Let’s say you have several high credit card balances with high interest rates. With the debt consolidation program, you will be able to lower the interest rate you’re paying and manage the debt better.

Debt Consolidation Programs Reminders
A debt consolidation program doesn’t eliminate your debt. All these programs do is move your debt to make it easier to make the payments.  You will have to pay the money back sooner or later since you do owe it.

One problem with a debt consolidation program is you will feel like you owe less.  Your credit cards will again have large amounts of available credit for you to use. Beware of digging yourself into a deeper hole by continuing to add to these balances.

With a debt consolidation loan you may end up paying more in total interest. By stretching your payments over a longer period of time, your total interest cost could possibly be higher. Of course, it may help you more easily manage your current cash flow.

There are risks by using debt consolidation programs. If you’re using a home equity loan or line of credit to consolidate your debt, the consequences of falling behind on the payments can be disastrous. You could lose your home if it is pledged as collateral against your loan.
How to Choose the Best Debt Consolidation Programs
You should shop around to find a program that fits your needs. Local credit unions and banks you already deal with are a good place to start. They are a reliable source and will most likely give you a fair deal. You might also try a bank you aren’t currently working with. Be careful of scams though, when searching the Internet for debt consolidation.

When searching for a debt management company, look for experience, how professional the company is, their assistance and budgeting services. Try to find a local company you can communicate with without having to drive for hours to talk to your counselor.

The debt management industry is unregulated. Scam artist are out there waiting to charge your outrageous fees without informing you of the best solution for your situation. Try to find out some of their customers and talk to them. Get recommendations and research online if possible.
When you team up with a debt management company who is less than above board, you may be left feeling insecure. You should relate well with your counselor and understand what they suggest. That peace of mind should help you pursue your goals and your financial future more comfortably.

Also the debt management company your choose should be a be advise you on how to deal with angry creditors, whether bankruptcy is an option or how to consolidate debt or simply reorganize your bill payment schedule.

Remember, your main goal is to work towards a better understanding of your financial debts. You will want to learn how to take care of your own debts, assets, and financial goals through your counselor’s advice. The debt management and debt consolidation is only stepping stone towards your own financial self-reliance.

1.Credit card companies can change almost all of the terms of the credit card by giving just 15 days notice.

We get used to credit card companies adjusting their lending rate by 14% as interest rates fluctuate but did you know they can alter any of the terms for any reason. For example they can increase the late payment fee and they can increase the interest rate without the need to justify it. If you are late or miss just one payment the low rate you are currently being charged can double or even treble almost overnight.

2.Credit card companies can increase the cost of a purchase months after you bought it.

If you purchased a widescreen plasma TV 3 months ago, using a card which at the time was costing 9.9% apr, and you are late with just one payment, the credit card company can charge you a late payment fee, say £40, and increase the interest rate to 29.9% apr, or even more, and there is nothing you can do about it.

They can, in effect, increase the cost of your TV months, or possibly even years after you purchased it. The TV retailer wouldn’t be allowed to do this but your credit card company can.

3.Discount offers are only good if you keep up all your payments.

Interest free balance transfers and initial periods can dissapear for any minor omission. Failure to keep to all the terms of a card will result in special terms being withdrawn and possible penalty interest being applied. If you have interest free purchases and balance transfers make sure you keep up the payments.

4.It’s not just your card payments you have to keep up.

If you miss a payment on your mortgage, or your car or any other financial payment, your credit card companies can re-assess your credit score and increase your interest rate accordingly.

If you therefore miss a loan payment on your boat or car, but still pay the payments due on your cards, you can find that your credit card interest charges jump to 2 or 3 times the original rate.

5.Credit card companies are today making record profits from you.

If you don’t pay your cards in full each month credit card companies make the majority of their profits from you and a substantial portion of that is in the additional charges they levy.

It makes little or no sense to keep money in the bank earning 5% maximum and pay 29.9% or 19.9% or even 9.9% on your cards. Pay off the card and use the card for emergencies rather than the savings. Without the card payments you will be able to rapidly replace the savings.

Without your knowing credit card companies can hold you hostage at the very time you may really need financial assistance. Don’t allow credit card companies the continuing opportunity to make record profits at your expense, and at the same time the opportunity to benefit from any misfortune.

If you can pay the balance off withing 3 to 6 months do so otherwise consider some form of consolidation loan to remove the noose credit card companies have around your neck.