Debt Consolidation Loan Advised As 'Way Of Reducing Financial Pressure'

Although last week saw the Bank of England maintain the base rate of interest for the third consecutive month, those looking to apply for a personal loan should still do so with care, it has been suggested.

Although last week saw the Bank of England maintain the base rate of interest for the third consecutive month, those looking to apply for personal loans should still do so with care, it has been suggested.

Read More:
Scottish Borrowers 'Hit Hard' By Rising Levels Of Debt - Consumers in Scotland are increasingly struggling with debt, new figures indicate.

Despite the Bank's monetary policy committee deciding to keep interest rates at 5.75 per cent over the course of October, it was suggested that the impact of the five increases carried out since August last year and the uncertainty seen in the global financial sector is putting more strain on levels of disposable income. In turn, it was intimated that this will see loan lenders begin to hike interest rates charged on their personal loan products. Meanwhile, surging levels of bad debt are to see more Britons begin to struggle with their finances, reports the Daily Telegraph.

Read More:
Eliminate Debt? The Unforgiving Truth Behind Paying Off Your Personal Debt! - I am going to lay out the basic truths that are at the base of paying off your personal debts. Eliminating your debt is really not a complicated thing...

Philippa Gee, from independent financial adviser Torquil Clark, advised that people should look to rein in their spending as more consumers are to see a rise in monetary pressures, with applying for a debt consolidation loan suggested as one possible way of doing this.

She told the publication: "Rate rises on personal loans are not the only increase in costs that will hit the family budget. In the months ahead, many homeowners are going to be hit with higher interest rates on their mortgage and there is also Christmas ahead which is always an expensive time of year. If the credit crunch continues, we are likely to see more rate rises. You need to reduce your debts as soon as possible, starting with those with the highest interest rate such as credit and store cards and limit your spending and expenditure as much as possible."

Read More:
How to Dispute Your Credit Report - A brief discussion of the steps consumers need to take if they discover incorrect or inaccurate information in their credit report.

Meanwhile, Sue Hannums, from independent financial adviser AWD Chase de Vere, said: "We have been lucky in recent years with low interest rates, which means borrowing has been cheap. But the tables have now turned." She reported that as loans and other forms of borrowing are "not that cheap any more" consumers should take the time to consider their financial options.

As a result, the Daily Telegraph advised those borrowers looking to apply for a loan to ensure that they search for the product with the lowest rate of interest, as otherwise they could "risk paying hundreds of pounds more than [they] need to over the term of the loan".

Read More:
Credit Card Debt? How To Identify These 3 Rabid Credit Card Debt Relief Scams! - Credit card debt is a growing problem today and managing your debts while trying to pay them off is hard enough without the scam artists. I am going to...

Meanwhile, drawing up and sticking to a monthly budget was also recommended as doing so can allow consumers to identify where their money goes and areas in which they can make savings. The publication also warned those taking out a debt consolidation loan against borrowing money again and urged them to avoid extending overdraft and credit card limits.

And by applying for a debt consolidation loan, people may find that they have more disposable income left at the end of each month as they can pay off debts accrued via overdrafts, personal loans, credit cards and other means quickly. Earlier this year, Rachel Fish, commercial manager for TaxDebts, claimed that as evermore Britons struggle to manage their finances, those who find that they are getting into an untenable position to make repayments need to get themselves "sorted" by tackling their debts head on and dividing the money they owe into manageable repayments.

About the author: Steve Smith writes for 1 Stop Finance Shop, where our visitors have access to all types of finance from payday loans and unsecured tenant loans, to self employed loans for homeowners.

Home - Finance - Debt Consolidation

Comcast | Car Insurance | Mobile Phones | Flights | Loans