Monday, April 20, 2009
Category:
Consolidation
According to Unbiased.co.uk, the nation worked for the first 83 days of the year merely to cover the interest on debts.
As a consequence a dent has not yet been made in the actual debts, hence why Wednesday 25th March has been dubbed ‘Debt Freedom Day’.
The new figures released by Unbiased.co.uk reveal that the level of personal debt in the UK has risen. In 2008 this stood at £11.4 billion, marking a £1.6 billion increase on the previous year. In addition, the level of mortgage debt from equity release loans increased by £6.5 billion during the same period. Despite this however, a reduction in excess of £4.9 billion was noted in the field of credit card debt.
The recent series of interest rate cuts has resulted in a 3.25 percent reduction in the average interest rate on personal loans, which should assist many people in their efforts to repay what they owe. However, the fact remains that a significant level of personal debt exists across the county as highlighted by ‘Debt Freedom Day’.
Chief Executive of Unbiased.co.uk, David Elms, said: "It takes a date like Debt Freedom Day to bring home just how long we are spending as a nation on debt and it will hopefully spur people into action to do something about their debts.
"Tackling your debt can be a daunting task, but you don't have to do it on your own. With interest rates at a record low now is the time to seek independent financial advice to ensure your money is working as hard as it can and any debt is being repaid as quickly as possible. Seeking independent financial advice is the first step to take control of your debt management - an IFA will take a look at all of your finances to work out the best way for you to pay off your debts."
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Homeowners who currently have multiple debts in the form of credit cards, store cards, personal loans and hire purchase arrangements, could consider consolidating these with a secured loan. A
secured loan to consolidate debt could potentially eliminate juggling multiple monthly repayments by leaving borrowers with just one. This new monthly repayment could even result in lower monthly outgoings, freeing up some hard earned money to invest into savings. A secured loan is one of many financial options to consolidate debt and if taking this option, homeowners should note that consolidating debt may increase the amount paid back overall and extend the repayment period of debts.
