Many UK consumers struggle with debt elimination. Interest rates are higher and higher and penalties are piling up every month, increasing the debt we carry every single day. Many struggle to find a solution to get rid of debt. The solution is getting a consolidation loan that will pay off your current debt leaving you with affordable monthly payments. This article provides you with a guide to debt elimination in the UK.
Types of debt
Before seeking proper debt elimination help, you must understand what type of debt you are in and whether you need a debt reduction or debt elimination. Credit debt elimination and credit card debt elimination are the most encountered type of debts. Credit debts are usually vehicle loans or mortgages. Another type of debt is that which accumulates by not paying bills on time.
Where to go
Consolidation loan Debt elimination is actually done through a consolidation loan. A consolidation loan is completely covering your debt so that no interest or penalties gather up. It is called debt elimination because you use the loan to pay off a major portion of your bills, leaving you with a smaller monthly output to your debts. You are no longer on the verge of having the debt collectors at your door, but you are simply getting a loan that you can actually afford to pay back on time. Here are some of the financial institutions that you can check for consolidation loans: · Credit card debt consolidation companies · Banks · Credit unions · Building societies · Online financial institutions
What to do
This is probably the most difficult step because you are not really sure what to do. These are some of the steps that you can take in order to eliminate your debt: · Check online for debt elimination programs and compare the offers using the online calculators. · Get in touch with companies specialised in debt counselling services. · Go to the bank that you are indebted to and try to reschedule your payments or change the terms of your contract so that you can pay on time.
A piece of advice
Financial institutions are eager to offer solutions when you are looking for a way out of debt. But some companies offer alternatives that will bury you even more in debt. Here are some guidelines to help you make an informed decision: · No matter how desperate you are, never go to a high-interest financial institution for a consolidation loan. They are high interest short-term loans that will provide only short-term solutions and will eventually worsen your debt and not eliminate it. · Always read the fine print before signing anything. The trickiest information is often placed in fine print.