Are Secured Loans And Remortgages Right For Your Debt Consolidation?
Debt is a fact of life for most of us. The truth is, everyday life is expensive, particularly if we are raising a family. And with the world economy just starting to emerge from one of the worst recessions on record, many people are finding themselves saddled with bigger debts than they ever expected. Many people have been “downsized” or made redundant, and time between jobs often means dependence on credit cards for essentials. Even a short spell of economic uncertainty can result in debt accumulating. Tackling looming debt is an important step in improving our personal economic circumstances.
Taking out more credit cards is not a good solution. Not only can having too many credit cards damage your credit rating, the temptation is often too great to purchase unnecessary items, adding to debt needlessly. On the other hand, paying back debt at the high interest rates that most credit cards charge can take a long time and can result in hundreds or thousands of pounds spent on interest charges. Applying repeatedly for more credit can also harm your credit rating, even if you’re chasing lower interest rates in order to get a handle on your debt. What’s a person to do?
For some people, getting a remortgage, which is taking out a loan secured by the equity you have in your home, can help you consolidate your debts at a lower interest rate. Doing this while avoiding taking on new debt can help you pay off your debts faster and save greatly in interest charges. Companies that specialize in such loans know how to find a loan that will work for you without the repeated credit applications that can damage your credit history. The interest rates on these types of homeowner loans are generally far lower than the rates on credit cards.
But homeowner loans are not the only type of secured loans. If you’re not a homeowner, then a remortgage is not an option. However, many lenders will accept other forms of collateral, including jewelry or other valuables, or investments you may own. It’s important that you speak with a lending specialist to discuss your particular secured loan needs and what you may be able to use as collateral.
Getting debt under control is very important to getting your finances as healthy as possible. If you have five different credit cards with balances, you’re probably being charged high interest rates on most or all of them. Add to this the organization you need to be sure your payments are made on time, and it is easy to see how late fees can add up, and credit card issuers can ratchet up your interest rates. Just one late payment can result in a significant jump in the interest rate you’re charged on your credit card.
Consolidating existing debt, while avoiding new debt is one way to pay off debts more quickly, and with more simplicity. Debt consolidation can take you from making several payments on debt each month to making one payment to cover all your debts. The result is that you’re less likely to forget a payment, and that you’ll be paying a lower interest rate overall.
Champion Finance arrange whole of the market secured loans and remortgages for all purposes.
Processing your request, Please wait....
