Debt Consolidation Loans Are ‘Good Way’ Of Getting Finances Under Control
Those consumers who are developing debt difficulties need to “take control” of their finances, an industry commentator has warned.
Writing in the Daily Mirror, Nicholas Hopkins pointed to statistics released by Credit Action which reveal that Britain owes a total of 1.4 trillion pounds via mortgages, loans, store cards and other types of borrowing. As “borrowing fever has gripped the nation” he also asserted that it takes just four minutes for the country’s personal debt levels to rise by another 1 million pounds. Mr Hopkins also asserted that with some 53.4 billion pounds being owed through credit cards, those people who consistently rely on plastic to meet essential demands on their spending such as utility bills could find themselves “being caught in a debt cycle”.
He claimed that although it is “tempting” for Britons to make use of credit cards to help supplement their finances, those who fail to pay off the total amount of money they owe each month are set to find their attempts at money management coming under more pressure. By not making the full repayments, Mr Hopkins predicts they will find that the proportion of cash they owe increasing - and as interest rates are currently rising - it is possible that borrowers will find themselves only owing more money which in turn may take them “a lifetime” to pay back.
In addition, Mr Hopkins stated applying for a personal loan as a means of debt consolidation “can be a good way” for consumers to rein in their spending and get their finances back under control. By taking out such a loan, the commentator stated that instead of having to remember to make payments to a number of creditors each month, borrowers will be able to reduce their outgoings into one low-rate sum.
However, he warned that there is a “danger” attached to getting a personal loan. After being granted such a loan, people may be tempted to splash out lavishly. Despite this, Mr Hopkins urged those applying for a loan to pay off debts accrued on credit cards to keep this purpose in mind upon getting the money into their account. He added that even when they have cleared that which is owed on plastic cards they will not be free from debt. As a result, borrowers were advised of the need to make sure that they are “strict” with themselves to make sure they meet monthly demands for payment. By making and sticking to a budget, he purported that consumers may soon find their “debt black hole diminishing”.
Speaking earlier this year, Edward Simpson, public affairs chief for the Finance and Leasing Association, suggested that the taking out of debt consolidation loans and other types of credit can act as a “great enabler” when used wisely. He asserted that such borrowing can often help consumers to manage through the various ups and downs of their spending. However, Mr Simpson urged those looking to apply for a debt consolidation loan to make sure that they will always be in a position to meet demands for repayment.
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