It’s a widely and justly held belief that January is the most depressing month of the year. The first Monday of the New Year is said to be statistically the day on which most applications are filed for divorce, and the 22nd of January is, according to researchers, the year’s most depressing day, when credit card bills and other evidence of Christmas excesses start hitting households across the country.
With finances high on the agenda it’s likely many of us could be in for some serious soul searching. We’re said to have spent £34 billion on credit cards through December, and with 4.4 million still struggling to clear Christmas debts from 2006 some drastic action may be required.
For those of us seemingly stuck in a debt cycle MoneyExpert.com can help you break out of the loop, and set yourself up for an excellent 2008.
Managing your debts
Balancing a whole raft of different debts can be time consuming as well as tricky to manage and can lead to your finances spiralling out of control.
Many of us will have overdrafts on our current accounts, alongside credit card debts, and may even have store card debts incurred over Christmas. There may be personal loans to consider, and thousands have the burden of car finance deals and hire purchase agreements, too.
The issue is that each source of debt will charge a different rate of interest making it difficult to balance your priorities. Consequently it’s all too easy to opt for the minimum repayments on some debts; a short term solution that will only increase costs in the long run.
Get it in order
Rather than struggling through the maths of half a dozen different demands on your finances, not to mention the paperwork, you should be able to save yourself time and money by paying off all the debts with one loan, and then concentrating on repaying that debt alone.
That loan is known as a consolidation loan, and whilst allowing you to manage your finances far more easily it should also help to reduce your monthly outgoings. So the pressure on your finances should ease.
If you want to work out how much money you could free up – and how much you might need to borrow, click on MoneyExpert.com’s Debt Consolidation calculator to see what you can save.
Where to look
Banks and building societies plus some specialist firms offer personal loans for up to £25,000 which you can repay over periods as long as seven years. Click here to check out the most competitive rates.
Alternatively you can look for a secured loan which is secured against your house. This can be paid off over a longer period and you can borrow higher amounts, although if you don’t meet repayments you could be at risk of losing your home.
You should wherever possible look to pay your debts off as quickly as you can. The longer you borrow money for the more interest you will pay.
Don’t get carried away
Consolidating your debt is a great way of re-organising your finances and setting you on course for a debt free future.
It shouldn’t be seen as a way of setting yourself up to borrow more money. You shouldn’t need to keep consolidating and consolidating. It’s time to break the debt cycle and become debt free.
Debt Consolidation Calculator – see how much you could save
Personal Loan Finder
Secured Loan Finder