Are you considering a debt consolidation loan in the U.K., but aren't
what to expect? Debt consolidation by definition is simply
the act of combining multiple debts into one for the purpose
of lowering the consumer's overall monthly payments. Most
consumers who pursue a debt consolidation loan in the U.K. are
seeking relief from heavy financial burdens, overwhelmed with
high interest or monthly payments, or at risk for bankruptcy.
Below is a quick guide that enables you to be prepared when
you apply for a debt consolidation loan in the U.K. There
are a number of financial obligations you'll need to factor
into your loan when applying.
You'll need to provide a list of your current bank debts, such
as mortgage and personal loans. For every debt, you need to know
the exact monthly repayment amount. You might also want to jot
down the interest rate for each loan. This will give you
an idea of how much interest you're paying per month.
Make a list of each credit card you own along with the monthly
payment amount and interest. This will also include any retail store cards.
If you have a higher priced vehicle, you may have committed
to a hire purchase loan. This type of loan is often available
to those who need a high dollar amount for an automobile loan
or those who have a poor credit background. Unfortunately,
interest is usually much higher on these loans. You should
include this type of loan when applying for a debt consolidation
loan in the U.K.
You'll also need to include any type of automobile debts, both
small and great.
Other debts you should include are loans for furniture or
other major home cosmetics and any other monthly debt
These debts will be used to calculate how much you currently
owe and a new consolidated loan amount and monthly payment.
Your new loan amount will reflect an overall total of your
current debts. Each debt is combined into one loan by the
U.K. debt consolidation lender. The lender, in turn, pays
off these debts for you. Once the debt consolidation loan
is approved, you'll only owe one debt - to the lender.
The monthly payment to the debt consolidation lender will
reflect a combination of your debts, but usually is much
lower than the combined payments you had earlier. This
is the major benefit of debt consolidation loans in the U.K.
Your lower monthly obligation equips you to get "back on
your feet" financially and relieve stress of all those debts.
Answering to one company is much easier than answering to
five or ten companies. This is why debt consolidation loans
can sometimes be an alternative to bankruptcy.
Use this as a guideline when applying for your debt
consolidation loan in the U.K. Preparation is the first
step to financial freedom.