Rising bills should never be ignored. It is all too easy to keep spending on your credit card whilst making just the minimum repayment each month. This can very quickly result in an outstanding balance which can make your hair stand on end and a significant problem in regards to how to repay it.
Burying your head in the sand will ultimately cause you more problems because as your debt begins to mount, your credit rating will begin to move the opposite direction and because your credit rating can be checked by all companies to see if you have a poor credit history, whether you want a mortgage or finance for a new cooker, there is no hiding place from debt.
Taking Back Control
Debt consolidation is a very popular method of bringing things back under control, and thanks to the creation of ‘bad credit loans’, even people who will receive the cold shoulder from their bank will be able to successfully apply for a loan where not so long ago, this would not have been an option.
What Do I Need To Know?
Whilst the term debt consolidation is now common place in modern society, do you know what it actually means and how it can benefit you?
Below are 3 of the most important facts and thoughts relating to debt consolidation loans.
- The concept of debt consolidation is designed to allow the borrower to take out one larger loan to absorb smaller, more expensive debts, making one single monthly repayment which is both tidier and more manageable.
- Interest rates on some debt consolidation loans can be high so it is very important to ensure that your debt consolidation loan does not result in you actually paying back more in the end.
- If you are required to offer any form of security against the balance of the loan, missing any repayments can have serious repercussions.
For more information related to debt consolidation – http://en.wikipedia.org/wiki/Debt_consolidation
Should I Do Anything First?
As with all types of borrowing, it is important to go into the agreement with your eyes wide open. Before applying for a no credit check loan, it will be helpful to follow these steps.
- Conduct a comprehensive look into your debts. It is crucial that you find out exactly how much you actually owe.
- As much as the ability to stop spending altogether would often be helpful, it is not a realistic goal. As such, it is important to draw up a budget. This way you can monitor your essential outgoings and keep track of exactly how much money you will have left over.
- Prioritise your debts – rent or mortgage arrears should always be at the top of the list (along with any related insurances), then your council tax, followed by any utility bills.
Improved Credit Rating
One of the fundamental problems associated with mounting debt is the damage that it does to your credit rating. This can often prove to be a Catch 22 situation because if your credit rating is poor, the chances are you will not be able to get a loan from your bank. The creation of bad credit loans not only ensures that this is no longer the case, they can also help you to repair your credit rating.
Providing that once you have the loan, you continue to make repayments on time and in full, your debt will reduce and your credit rating will improve accordingly. It is not uncommon for people to raise their personal credit score through the use of no credit check loans such as guarantor loans, often resulting in more financial options becoming available to them in the future.