There are many Government run debt programmers who can assist with your debt process by offering template letters to send to the debt companies. An offer of payment, however small, is lawful in the eyes of court. However, ignoring a debt is not helpful, especially since court action will apply further fees. Therefore, writing to debtors with an offer of payment is the first positive step you can take in taking debt off your shoulders.
Unsecured Loans Verses Secured Loans
An unsecured loan can be used to buy a wide number of items, including electrical goods, cars, and holidays. They are not secured on property, vehicles, or other expensive items in the home. However, getting an unsecured loan can be more difficult in today’s financial climate, where retaining a good credit file is important. Unsecured loans can be borrowed over a set number of months, but the time period in which to repay is debt is not as long as long as a mortgage or other secured loans. The best way to obtain an unsecured loan is to visit your high street bank. The rate of interest through a payday loan company is often higher, but this is primarily because there are no credit checks in place.
A secured loan can give a creditor peace of mind, since a home, vehicle or other high valued item secures the debt. Whether you have poor credit, a default, or a county court judgment (CCJ), a creditor will not lose any monies, should you be unable to meet the monthly fees, and it is an impossible thought to lose your home over several missed payments. However, this is why secured loans are risky. A secured loan can be far more expensive over the long term, especially if the loan is not borrowed through a high street bank, but the rates of interest will vary on the current equity in your home.
Debt Consolidation Companies Verses DIY Consolidation
The first step to get out of debt is to admit that there is a problem. Whether you have an addiction to gambling or alcohol, talking to a loved one or friend is a good way to start the process of taking responsibility for your actions. Nobody wants to get into debt, but with the current financial climate, even the basic living expenses are high. It may seem like the only way out of this dilemma is to borrow money from a variety of sources. High street banks will only lend money to individuals who have a good credit rating, but payday loan companies are there to cater for everyone else.
Debt consolidation companies claim to take all of the stress out of managing debts, for a monthly or annual fee, but what they fail to mention is that you can perform the exact same process, free of charge. They claim to do a better job when this is not always the case. In addition, debt consolidation companies often charge an upfront fee, which may be one or two months payments that you have agreed to pay, once they have obtained the figures of your debts. Whatever the monthly amount that has been agreed, the debt consolidation company will be also taking their fee. There is no guarantee that using a debt management company who charges a fee will stop the phone calls and letters from the debtors.
A debt management company who does not charge a fee may be a better option for individuals who are struggling to make meet those monthly payments. They provide free impartial advice to everyone and there are free template letters that can help to get the process started.
Paula Whately is a writer who follows the changes in financial market. She has noticed that secured loans are a lot easier to obtain than unsecured loans, although they are riskier as they are put against a property or car.