In a climate of rising interest rates and rising inflation, Britons with a number of loans and debts find their life very struggling. It is beyond their capacity to pay what they owe each month. Now, the Bank of England has ruled out the possibility of any sharp reduction in the interest rates. As the rising interest rates begin to bite, you may find that keeping up with numerous monthly repayments on loans and credit cards at assorted interest rates become increasingly confusing and tough.
The situation in the UK is so gloomy that Britons owe more money than the entire economy generates in a year. According to a financial estimate, while the UK economy generates ?1.3 trillion a year in income, Britons are in debt to the tune if ?1.345 trillion. In such a situation, debt consolidation is a matter of relief.
Continuous growth of debt burden leads to debt spiralling. The UK economy no longer generates enough yearly gross domestic product (GDP) to cover the debt amount. In the last decade, the economy was self sufficient enough to engender income to cover its total consumer debt by August. But, now it takes longer than a year before the UK makes enough money to cover its total borrowing. The total debt burden on overhead is now mounting and creating a debt spiral. The only way left is consolidation loans which will convert the higher interest rate credit card and unsecured loan bills into an affordable easy loan plan. As the total payable monthly amount decreases after consolidation, the borrower finds it easy to maintain regularity.
It is a fact that debt consolidation loans are sold to people who own their own homes. This means that the loan is secured against the equity in your home and if you cannot pay it back, your property may be in danger of being repossessed. The payable interest rate is usually significantly lower than the rate charged on credit card balances. However, the sting in the tail is that because the loans are taken out over a longer period of time, you end up paying more interest in all.
When you are facing a debt crisis, you should seek debt management help from one of the reputed financial organizations. These organizations help you to assess your money problems and advise on the best course of action. A budget is also prepared that enables you to pay back your debts as quickly as possible.
