When a person thinks about their loans and credit cards they decide that they must sort them out.
We simply have taken on too many different bits and pieces of credit that are now proving hard to cope with.
We have a number of credit cards that were certainly useful during the recession when our working hours were reduced When our working hours were cut our salary was reduced.
These cards helped us get by and enabled us to put food on the table and pay our utility bills. Sometimes even our mortgage payment was paid by credit card.
Now that our salaries are as they were there is no longer any need to use credit cards as a means of survival.
Credit cards seldom have interest rates of less than 20% and are sometimes as high as 40% or even more.
Trying to pay these extortionate rates is financial suicide.
Having one credit card is often handy and sometimes essential when shopping online for our groceries as the super markets do not accept PayPal but there is no longer any need for having a number of cards with their almost criminal rates of interest.
Many people are still paying the home improvement loan that they arranged with the company that fitted their conservatory and new kitchen just before the advent of the credit crunch when it all seemed affordable.
With it’s interest rate of 25% this loan payment is also very high.
It is time now to grab the bull by the horns and do something to remedy the debts and pay out a lot less each month and this is when debt consolidation comes into the equation.
Debt consolidation combines all the outstanding debt into the one payment and not only that there are great savings to be made at the same time.
Therefore, debt consolidation loans not only make money management easier by granting one payment every month they also save money and often a great deal of money at that.
Tenants can always approach their own bank, and throw themselves at the mercy of hopefully a friendly bank manager but that is about the only option open to them, apart of course from debt management
Homeowners with equity in their property have other better choices, and that is either by taking out a secured loan or a remortgage.
Both remortgages and secured loans are forms of homeowner loans that release equity in the property to raise funds that among other purposes can be used for debt consolidation.
You are always best to approach a whole of the market secured loan or mortgage broker who has every remortgage and secured loan product at his finger tips to obtain the most suitable option for you with the lowest interest rate applicable to your circumstances.
At the moment secured loans are available from only about 9% APR and remortgages start at from less than 2% for homeowners with a maximum LTV of 60%
For those with less equity than this the rates are still very favourable whether a secured loan or a remortgage is the home loan of choice.
To give an example of just how much can be saved is that if someone has credit cards totaling say 40,000 the minimum monthly payment would be 1,200, and it would be twenty six years before the cards are fully paid off.
A secured loan for the same amount would cost in the region of 650 pounds over a ten year period which is a saving of almost 50% monthly and has a repayment period of ten years compared to twenty six years.
Sounds too good to be true? Well it is in fact true.