While we cannot offer advice on debt consolidation, the following general information may help you better understand how debt consolidation happens. It does not constitute financial advice and you can contact the citizens advice bureau for further information on organisations that may be able to help and advise you on the process of debt consolidation.
If you are concerned about the amount of debt you are in, stay calm and look at your debt problems with a cool head. A first step is to contact the persons/ companies you are in debt to and inform them that you are experiencing problems. They are more likely to help you if you contact them first.
If you have multiple debts or are in arrears with your bills, consider deciding which debts you are going to pay off first. These will normally the ones with the most severe consequences for non-payment. For example if you don't pay your rent or make your monthly mortgage payment you could end up without somewhere to live. Not paying your utility bills could leave you without heat or light. A next step to consider is calculating how much you can afford to pay back in each month.
If you are considering take out a further loan to pay off existing debts (a so-called debt consolidation loan) think carefully. A lot of these loans have very high interest rates and you may end up paying a lot more than the amount borrowed when interest payments are taken into consideration. Be particularly careful with secured loans which are secured against your property as you could lose this if you fail to make the monthly repayments.
Make sure your income is being taxed using the correct tax code and you are getting the benefits and tax credits you are eligible for. Cut down on your spending and cut out non-essential spending like cigarettes, alcohol and lottery tickets.
Always remember you do NOT need to pay for debt advice about your debt problems. Your local Citizens Advice Bureau can offer FREE independent help. In addition they can help you calculate your payment schedule and talk with your creditors.
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