Debt problems – they seem never ending…
A friend of mine recently came to me asking for help with her debt. She had four loans, all to different creditors and just wanted to make them easier to manage.
She could afford her repayments with no problems at all, but just found it difficult and stressful to sit down every month and work out where her money was meant to be going. She was concerned that the confusion she felt when sorting through her paperwork could lead to her missing payments.
After talking about her problem, we sat down at my computer and searched the internet for help. We came across a solution called ‘debt consolidation’.
If she wanted to go ahead with debt consolidation (for more on debt consolidation, click here), she would take out a new loan, and use it to repay all her outstanding debts in one go. This new loan would replace her old debts and leave her with just one debt – meaning she would have just one payment to make each month instead of several.
So, she went ahead with it! The good thing about it, she said, was that the loan provided (known as a debt consolidation loan) actually had a lower interest rate than all of her previous debts – which means she would be saving money in interest – so to her, taking out a debt consolidation loan probably was the best option.
It’s now a few months on, and my friend’s financial situation really couldn’t be simpler. She makes just one payment each month and all of her old debts have gone. She is stress free, and on her way to becoming debt free!
