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Taking out a loan is a big decision and it is important that it is done only after a full consideration of the situation. Most people in their lives will have to take out a loan at some point. For instance, few people in this day and age can afford to buy a home without a mortgage or will always be able to cover large purchases without taking out some form of credit. What is important is to ensure that they are careful when they are doing it – that they seek sound advice and only borrow within their means.
Within the UK, there are both official and unofficial bodies offering different types of debt advice, aimed at people in various different situations. For instance, the Money Advisory Service exists to provide basic free advice on financial matters. If you are considering what to do next with your finances then their Money Health Check will be able to give you a few basic pointers as to whether taking on extra debt is a good idea for you at the moment. Please note, however, that this tool is not intended for those who are in serious financial difficulties and that it does not technically offer financial advice, just basic principles and guidelines. If you are in a more serious financial situation then there are other organisations that are designed to help you.
The Citizens Advice Bureau are a reputable, independent charity who also offer free and impartial information on topics related to finance and debt. If you are in serious debt they will generally help you to prioritise which debts you should repay first as well as drawing up a budget with you to make sure that you are repaying them within an adequate period of time. If, however, you are in a more serious situation than that they may advise you to begin to negotiate with your creditors to reduce the amount that you have to repay. Debt crisis is the situation in which someone has gotten themselves into more debt than they will ever be able to repay, generally by borrowing from multiple creditors.
One way of effectively negotiating with your creditors is to seek our a debt counselling agency. These companies specialise in negotiating with creditors in order to reduce the amount that you repay when their clients are in serious debt crisis. The fact that these are large organisations who deal with creditors on a regular basis can mean that they are able to obtain better terms on your behalf than you would be able to obtain on your own. Another service that they often provide is consolidating all of your debts into one monthly payment which reduces the chance that you will miss payments by forgetting to pay.
On the other hand, however, it is important to remember that companies who offer debt counselling are generally for-profit companies who make their money by adding a service charge into this monthly payment. You still end up paying less overall but some of the money goes to them. This means that these services can be compared on the basis of how much they charge.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk. Representative example: £400 borrowed for 30 days. Total amount repayable is £459.36.
Interest charged is £59.36, interest rate 180.5% (variable). Representative 728.9% APR. Samedayloans.org.uk is a registered trading name of Hellcat Media Limited
which is an Introducer Appointed Representative of Quint Group Limited, who are a credit broker not a lender.