Credit card dues, personal loan instalments, a new car on instalments, monthly bills and what not? Is there any crack to take a sigh of relief? Perhaps not. Every passing day the obligations are dominating your finances and the imbalance of income and outgoing has become the latest and permanent worry. One weapon and many fronts to fight, just like one income and many obligations. Does that work? No, practically not. You cannot control two boats with one paddle. Every boat needs a separate boatman and if that is not possible then bring all the stuff in the other boat, in your boat. Finances are not much different from this. If you cannot tackle multiple obligations in one income then why not make them affordable enough to fit in your financial limits? 

Debt consolidation is the tool that gathers the mess of scattered financial commitments and make them one. They all become one and also fit to your pocket size. Nowadays most of the people are struggling hard with stress and that stress is majorly due to financial factors. The loads of desires make you take more and more burden and a time comes when things get out of control. This gives a perfect construction for bad credit situation as mounting debts invite pending obligations and credit score degrades. Oh! Frightening for the financial future. 

You need to react on situations as then only the solution comes. The debt consolidation loans for bad credit in the UK are in the frequent demand because of the desperate desire by the people to get rid of money mess. 

You can use debt consolidation for.....

The purpose of debt consolidation is to amalgamate many obligations into one. It is important to know precisely what financial commitments can be consolidated. 

Credit Cards                              Store Cards                                Personal Loans

Consider consolidation of debts in following situations

There are many uses of debt consolidation and if any one of them relates to your situations, it is better to pick this option. 

• You want to maintain your income-outgoing balance.
• You cannot manage to pay multiple instalments.
• Varied interest rates on varied financial commitments are out of your affordability and you need one interest rate.
• You want one fixed instalment.
• You are looking forward to take a home loan and need to look more credit worthy.

ANSWER OF SOME OF YOUR FREQUENT QUESTIONS

Like many people, you are interested in debt consolidation but at the same time devoid of confident decision. Reason, lack of knowledge. Financial decisions should be informed and here are the answers of some of your most frequently asked questions.  

How does debt consolidation work?

To start and end in the simple words – Debt consolidation loans merge all your loans and borrowings in one loan. In place of paying multiple instalments, you pay only one instalment, which can provide a huge financial relief.

Mostly these loans are unsecured and you get them according to your creditworthiness. No obligation of collateral and guarantor.

What situations I may face in case of bad credit?

The bad credit people may not get much low rates but some good things are also there to expect. The repayments become comparatively less burdensome and by making timely repayments, it is easy to earn a boost in credit rating.

What are the major advantages and disadvantages?

• All debts become one with only one FIXED interest rate.
  
• Obligations are easy to manage with one fixed instalment.
• Your credit worthiness improves as you have no scattered debts and there is some space in your financial capacity to get a new loan. Lenders consider it important.

Disadvantages

• You may have to pay higher interest rates due to the increased total cost of merging all the obligations.
• You may need to pay early repayment fee. Many lenders take this fee if you pay off a loan before the decided tenure.
• You may have to pay more as the loan tenure may go longer.

Can I use credit cards after debt consolidation?

Of course, you can continue using your credit cards after getting its dues consolidated. It is a prevalent myth among the people that they cannot do so once they go for the debt consolidation. The reality is different from perception. Debt consolidation only reduces the balance on credit cards to zero. It never closes your credit card and also never affects the way you use it.

What is the basic criterion to apply for these loans?

Not much complicated especially with online loans coming more in practice, the procedures are faster and convenient.

• Minimum age should be at least 18 years.
• Maximum age is 70 but this may vary from lender to lender.
• Address proof
• Reliable repayment capacity

One piece of advice – If you have bad credit then it is better to have your name in the electoral roll. It is usually the first place that lenders check to know your identity, address and with whom you live.

However, this is important for you as a citizen whether you take the loan or not. But for the people in financial struggle, this can benefit more.

‘ONE’ thing is always easier to control and manage than ‘MANY’ things. In finance, it becomes more important. Once everything comes under control, commit yourself to not to mess in money matters again. Biggest luxury of life is not money but the financial stability and security. A simple salaried person with stable finances is happier and richer than a millionaire businessperson with a debt burden of billions.

Keep desires but not greed, spend money but also know how to save and manage AND there is always be a win win situation.