Are you finding that debt is getting on top of you? Is the impending financial crisis a real worry and a motivator to get your affairs in order before the worst hits? Then the first thing to do is not panic. There are ways and means of taking back control of debt and making it more affordable – even in the tough times ahead.

One of the main ways you can do this is to restructure your debt through a consolidation loan. This helps to simplify your debt and create more manageable payment plans. If this sounds like something you could benefit from, then keep reading to find out more.

What is a consolidation loan?

This is a type of loan that bundles together all of your existing debts into one lump sum, meaning you only have to worry about one regular payment. This could be credit cards debts, car repayments, health outgoings or repair costs. Basically, however you owe money you can gather it all together under one umbrella for a more manageable and straightforward debt repayment scheme.

There are many benefits of doing this, including…

  • Easier to manage repayment deadlines

At the end of the month it can be a real hassle trying to work out who and how much you owe. Making lots of little minimum payments can be confusing and also means you might end up paying more than you have to.

Putting all your debts into one lump sum makes them all easier to manage. Just one payment each month is quick and easy to take care of.

  • Lower interest rates

One of the big problems with multiple small debts is that each one will have an interest rate added to the outstanding amount. It gets worse if you miss a payment and interest is compounded and added to next month’s bill. With a debt consolidation loan you only have to deal with one interest amount and this may often be smaller than all the other rates when combined. This means you will pay back less over time.

  • Less risk of repossession

If you have put up collateral to back up borrowing in the past, then this can mean you are at risk of having goods or even your home repossessed if you can’t afford to meet your repayment plan. Having collection agencies at the door or taking your things away is a terrible thing to happen and should be avoided at all costs.

By consolidating your debts and focusing on just one collateral item, the risk of repossession is reduced, especially as you will be freeing up money to repay your loans in full.

  • Regular fixed payments

Imagine having the same repayment amount every month. Just set up a direct debit and you don’t even have to think about it. This makes budgeting so much easier and allows you to put aside money each month to cover your debts. No running around trying to work out how much you owe to each debtor.

  • Less stress

As you can probably already see, one of the major benefits of a consolidation loan is that it reduces the stress you may find yourself under from multiple loans. Stress, especially stress caused by money matters, can be really debilitating and even bad for your health in the short and long term.

Once you get debt consolidation you will suddenly find that your life is much easier. The debt is still there but it is so much easier to manage. You’ll be happier, less anxious and the weight of the world won’t be on your shoulders every month.

  • Improve your credit score

Making regular payments on time can really help to improve your credit score. Just missing the odd payment for other loans can have a big impact on your credit rating and this can take years to recover. But it is easily done when you have so many small debts to deal with. By reducing the amount of things you need to worry about you can focus more on regular repayment and help to build your score, which will be financially beneficial in the future.

  • Tips on restructuring your personal loan

There are plenty of reasons why you would want to get a consolidation loan, as you can see from the above. But you should always be diligent about any financial decisions you make. Try not to be drawn in by introductory offers that promise low interest rates now but that will go up after a certain period as you could find yourself paying back more than you need to.

Always borrow from a reputable lender and one that is accredited by the right UK institutions.

Consolidation loans only really make sense when any savings you make are not wiped out by fees or charges so make sure you are very clear about what these are and when they might apply. You also need to know that you can afford to make the repayments, both now and in the future.

Of course, it goes without saying that once your debt consolidation loan is in place and you are making savings on your monthly repayments, this money should be used to stay financially responsible and avoid any unnecessary future borrowing. Consolidating your debt

is the first step towards getting on an even financial playing field but it is up to you to do the hard work to get you there.

You also need to have some kind of security in place should something bad happen. If you lose your job or interest rates go up and you can’t afford to make repayments, you may find yourself in even more financial hot water. Make sure that your loan is affordable and then you can reap the rewards of all the benefits of consolidated debt.

If you would like more information about debt consolidation or to find out if this is the right option for you, then get in touch with a member of our team here at Leading UK Business Services on 01603 552028.