Consolidation of your debts using credit cards
You have credit card/cards. Due to various reasons you have got yourself into unmanageable debt. How can you come out of it?
It can be so easy to get yourself into credit card debt. More and more people are contacting the Citizens Advice Bureau to counsel them on credit card debt. The usual reason is income cannot keep up with expenditure. It is now the case that lots of people are even using credit cards to pay their mortgage or rent each month. Having exhausted as many 0% APR credit card deals as they can, these people now find themselves in a situation where they are going to have to pay interest on interest (anything up to 18% APR) on their credit card debt and their credit card debt is going to escalate unless they can make substantial repayments.
With this in mind many people are now looking to consolidate their credit card debt by taking out either secured or unsecured loans.
The benefit, to a person of either a secured or unsecured loan is that the payment of the debt is over a longer period and the interest rate is lower. This results in a lower monthly payment. As with obtaining any credit the secured and unsecured lenders will carry out a credit search. The outcome of the credit search will determine the interest rate to be charged to reflect the perceived risk. The secured loan is secured against the person’s property so is regarded as less of a risk than an unsecured loan which is not. As a result the interest rate charged on secured loans is lower than for unsecured loans.
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