Tips on Consolidating Your Debt
Around 8.3 million people in the UK are unable to pay off debts or household bills, according to a report from the National Audit Office (NAO). However, you can take steps to relieve yourself with the money you owe.
Debt consolidation loans are a popular option that are used frequently in the UK. These loans can be used as a secured or unsecured loan type. Basically, the idea with this loan option is to help you pay off your debt in a shorter period, along with offering you one payment to manage (rather than multiple outgoings) and overall a better interest rate.
Work Out How Much You Need
Not many of us enjoy crunching the numbers, but working out exactly how much you owe across all lenders/creditors has to be the first step for you to take. Once you’ve done this, you’ll be able to work out how much you can borrow based on your earnings and affordability.
Check Your Credit Score
If you have a low credit score, there are loans to suit poor credit ratings, but the interest is likely to be higher. If this is the case for you – you’ll need to revert back to that number crunching stage and work out if you’re saving money by going down the consolidation route.
Compare Consolidation Loan Offers
Some people unfortunately make the mistake of going for the first offer they see/receive. Comparing your options is time consuming but worth it if it’s going to save you on interest. Use a platform that searches a range of lenders with different rates and fees, so you can make the best decision. We recommend gathering at least 4-5 quotes before making your final decision – however, the more the merrier!
If you want to check out your consolidation options with us, feel free to apply now. LoanBird searches over 30 lenders for you via one application form.
Other Areas to Consider When Consolidating:
- Consolidate your debt using a credit card balance transfer
- Use a personal loan to consolidate
- Remortgage your house if you have equity
- Use some of your pension – the initial 25% is tax free!
- Could you ask any family or friends?