If you find you are being charged high rates of interest on loans then a debt consolidation loan may be for you. However this only makes good sense if your new loan is a lower interest rate and will cost you less in the long run. A lower cost loan should also leave you with more spare cash to reduce your debt even faster.
Here are a few other things to consider:
- Other lenders’ fees. Some lenders charge an ‘exit fee’ if you end a loan early, ask them about any fees or charges before transferring the debt away from a lender or to another lender. AdvanceCU does not charge admin fees and exit fees on our loans (except for an optional £1 Express Payment fee).
- Cut your spending. See our Household Expenses article for ways to live for less. This should give more spare cash to help pay your debts.
- Anything in your future? Is there some change to your life soon that could affect your income, expenditure and you ability to repay a loan?
- Payday lenders are a warning sign. If you find you regularly resort to high interest short-term lending this could indicate that your finances are running out of control. You may need some free debt advice.
- Beware minimum payments. It can take a very long time to clear a credit card if you only ever make the minimum payment. Check out www.cardcosts.org.uk to see how much you credit card could be costing you.
- 0% credit cards. Some credit cards permit you to transfer debts to a balance transfer credit card at either 0% or a low interest, subject to credit check. This can help clear credit card balances at low cost.
How Advance Credit Union can help
Engage Account is our Visa Debit card account, great if you don’t want to increase your credit card debt. Plus cashback on spending at select retailers.
Regular Savings. Saving just a small amount regularly with credit union will soon grow into a tidy sum.
A loan from AdvanceCU could help spread the cost of repaying your debts. Borrow up to £8,000 from 12 months up to 36 months. Subject to affordability and credit check.
Engage Account offers great cashback rewards and discounts at Asda, Argos, M&S, Debenhams and many more. Plus your Engage Visa card is accepted wherever you see the Visa logo (see terms and conditions)