Debt Consolidation Programs – All You Need to Know & FAQs
If you find debt difficult to deal with, you should know that the government has designed many ways for you to pay your personal loans back.
One such way is a debt consolidation program. I have compiled an article with everything you need to know regarding the different programs that you can opt for.
Let’s dive right in.
Debt Solutions For You To Consider
There are several debt solutions. When you take a loan, you should know that there are several ways you can pay it back. So no, you won’t always have to sell your home to pay back your loans.
By ‘ways’ I don’t mean just keeping on a budget and trying to reduce your spending. The government has worked out different programs such as debt relief orders, debt management plans and consolidation loans to try and ease the debt problems of people.
You just have to be aware of these solutions. Never be hesitant in getting professional help. Debt advice will go a long way in getting you a better deal to pay off your dues.
Debt Consolidation Loans
An option that you can go for is a debt consolidation loan. This is a process regulated by the Financial Conduct Authority for people who have trouble paying multiple loans at a time. With a debt consolidation loan, you can combine your all existing debts into a single one.
The main trick is to make sure that you get a lower interest rate on your consolidated loan as compared to your previous individual loans. If you don’t have a lower interest rate with your second debt, there really is no point in consolidating your loans.
This process simplifies your monthly repayment plan as well. Instead of several, now you have to make only one monthly payment in order to pay back your loan.
Taking out a debt consolidation loan can be useful for you, but it really depends on your circumstances.
First of all, consolidation loans affect your credit score. The loan will stay on your file for at least 7 years. Moreover, it is a personal loan that can only be used for unsecured debts such as credit cards and payday loans.
If you need help with your monthly payment, talk to your lenders about the monthly repayments you have to make and convince them to lower the total amount of one monthly payment so that you can pay it back with ease.
Programs To Get A Debt Consolidation Loan
There are different programs that can help you get a personal loan or a consolidation loan. There are several companies that have standardized their rates for this purpose.
Post Office Personal Loan
This loan is provided by the Bank of Ireland. It is for a period of 1 to 7 years. The loans they give out fall in the range of £1,000-25,000.
However, there is a strict eligibility criteria that you must meet in order to qualify for this loan.
- Firstly, you must be at least 21 years of age
- Secondly, you should have a minimum income of £12,000.
Leap Personal Loan
Leap is a company providing loans for a term of 1-5 years. They deal in the ranges of £500 to £15,000. The maximum age for someone taking a loan is 55 years and the minimum age is 18.
TSB Personal Loan
TSB is a good option if you want to take a loan in the range of £1000 to £25,000. The loan can be taken in the period of 1-5 years. The customer service there is very good so you will have no trouble finding helpful customer representatives there.
The requirements to take a loan are fairly simple.
- You should have a good history
- You must be a UK resident
- You must be at least 18 years old
Frequently Asked Questions (FAQs)
How Long Do Debt Consolidation Loans Stay On Your Credit File?
Debt consolidation loans stay on your credit file for seven years. After that, your track record is cleared and you are ready to take a loan again.
Are Debt Consolidation Programs Useful?
Yes, debt consolidation programs are useful but not in every case. First of all, getting a good apr on a consolidation loan is hard. Moreover, people with a bad credit score will have a hard time getting good interest rates on their consolidation loans.
Get professional advice before getting a debt consolidation loan so that you know exactly what to do. Moreover, when negotiating the amount of your monthly payment and the interest rates, professional help will go a long way and will definitely help you save money.
What Is The Best Debt Consolidation Program?
The best debt consolidation program is probably the TSB Personal Loan. The services provided by this personal loan company are great.
They keep your bank account in mind while giving you interest rates as well so don’t worry about the rate being too high.
Are There Grants To Pay Off Debt?
No, there are no grants sponsored by the government to pay back your loan. However, the government does offer you multiple options when it comes to paying back your loan.
The availability of these options depends on your credit score. Maintain a good score and you will get a good debt solution for your problems.
A debt consolidation loan is a good alternative but only if you don’t have many other options available.
In a nutshell, a consolidation loan surely does simplify your payments though and turns your multiple lenders into one.
For more money advice, keep reading our articles. If you have any other questions, feel free to contact me on the email provided.