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Bring Your Personal Debt Under Control Before Economic Conditions Make it Unmanageable
- By Howard Ogollegos
- Published 10/25/2011
- Real Estate
- Unrated
Despite tentatively recovering from recession, the British economy continues to struggle. Growth in the economy remains subdued with recent figures showing a slowdown in economic output. And, the continuing economic troubles are hitting households hard with wage freezes, spending cuts and increasing household energy and fuel bills to contend with.
Excluding mortgages, the average household debt in the UK is now GBP 8.144, rising to GBP 15,661 if households with unsecured loans are taken into account. These are the latest findings from Credit Action, a leading UK debt charity.
The figures from Credit Action also show that an average of 1,392 people lose their job daily whilst 337 people will be declared bankrupt or insolvent.
In the UK, the CAB, and organisation offering debt advice deal with over eight thousand debt problems every day. According to the CAB, the average debt in the UK is increasing and more and more people are seeking advice on how to deal with their inability to afford their monthly repayments.
Most of the unsecured debts in the UK are products such as credit cards and personal loans, which often carry extremely high interest rates. However if you are a homeowner, one option may be to remortgage in order to obtain finance to secure your debts against your home.
There are many advantages to such a move, such as dealing with one single creditor rather than several, one single monthly repayment, reduction in administration of credit accounts, and lower interest rates
. If your salary has reduced or your other monthly costs are increasing, this may be an option which can help you pull back from 'tipping point' on your finances, and mean that you have the security of knowing exactly what you'll be paying back each month - something which is rarely offered on unsecured debts.
You could possibly be looking to reduce your debt repayments each month and then later increase your repayments when your financial state improves. Remortgaging in order to cover your debts will lock a wide range of varying repayment rates into one simple standard rate, invariably a lower rate too, this gives far more clarity as a borrower.
It is vital to consult a remortgage professional before taking action, because some important calculations would have to be drawn up. It might be wider to pay off the consolidated portion of the debt in a shorter space of time instead of over the entire life of the mortgage. This is something that can easily be achieved through a mortgage that offers the facility for overpayments.
If your credit rating is very low, you may not have a huge selection of remortgage options, but as a general rule most remortgage deals offer lower interest rates than unsecured debts, and so you will still be better off.
A remortgage can be a great option if you're struggling with multiple creditors and lots of loans and credit cards. In the current difficult economic climate, reducing your mortgage repayments as well as repaying debts at high interest rates could be the solution to your financial troubles. It may also allow you to simplify your finances and to make your outgoings easier to control.
Excluding mortgages, the average household debt in the UK is now GBP 8.144, rising to GBP 15,661 if households with unsecured loans are taken into account. These are the latest findings from Credit Action, a leading UK debt charity.
The figures from Credit Action also show that an average of 1,392 people lose their job daily whilst 337 people will be declared bankrupt or insolvent.
In the UK, the CAB, and organisation offering debt advice deal with over eight thousand debt problems every day. According to the CAB, the average debt in the UK is increasing and more and more people are seeking advice on how to deal with their inability to afford their monthly repayments.
Most of the unsecured debts in the UK are products such as credit cards and personal loans, which often carry extremely high interest rates. However if you are a homeowner, one option may be to remortgage in order to obtain finance to secure your debts against your home.
There are many advantages to such a move, such as dealing with one single creditor rather than several, one single monthly repayment, reduction in administration of credit accounts, and lower interest rates
You could possibly be looking to reduce your debt repayments each month and then later increase your repayments when your financial state improves. Remortgaging in order to cover your debts will lock a wide range of varying repayment rates into one simple standard rate, invariably a lower rate too, this gives far more clarity as a borrower.
It is vital to consult a remortgage professional before taking action, because some important calculations would have to be drawn up. It might be wider to pay off the consolidated portion of the debt in a shorter space of time instead of over the entire life of the mortgage. This is something that can easily be achieved through a mortgage that offers the facility for overpayments.
If your credit rating is very low, you may not have a huge selection of remortgage options, but as a general rule most remortgage deals offer lower interest rates than unsecured debts, and so you will still be better off.
A remortgage can be a great option if you're struggling with multiple creditors and lots of loans and credit cards. In the current difficult economic climate, reducing your mortgage repayments as well as repaying debts at high interest rates could be the solution to your financial troubles. It may also allow you to simplify your finances and to make your outgoings easier to control.
Howard Ogollegos
Howard O'Gollegos writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.
View all articles by Howard Ogollegos