Financial emergencies are part and parcel of our lives, and it is human nature to settle an emergency as it occurs without thinking of the future implications of your actions. Of course this leads to debt and more financial problems, since once you are in the habit of getting a loan even for the tiniest of issues that crop up in your life as ‘emergencies’, it would be very hard to get out of the habit i.e. old habits die hard. It will only be a matter of time before you get labeled a debtor, a time when all your creditors will be calling you almost at the same time demanding for monthly repayments, a time when you will be having sleepless nights thinking of how to get out of debt. Undoubtedly the shortcut to your financial freedom is a debt consolidation loan.
There are two types of debt consolidation loans – secured and unsecured wherein for the secured, you will be expected to offer some form of collateral such as your home or car and the unsecured is the opposite of secured. You can take a debt consolidation to help manage and offset your current debt & equity release UK. Note that once you will be labeled a debtor, you ought to do all you can to save your reputation and name. When you think of debt consolidation, the lender will give you a very wide range of cash amount to choose from, depending on the level in which you are in debt. Since the lender is fully aware you will need enough time to pay back the loan, you will get a period of between 6 and 25 years, and sometimes even more if you sight valid reasons to get the loan repayment period extended. Note however that the added time will attract an extra rate of interest.
The two types of debt consolidation loans have their pros and cons. For the secured debt consolidation loan, its pro is that the rate of interest charged is significantly lower compared to that charged on an unsecured debt consolidation loan. Its con however is that you will have to put your property or auto in line as security. You ought to ensure the cost of the property or auto is equal to that of what you borrow. You should also ensure you repay your debt consolidated loan within the set time, failure to which the property auto will be taken by your lender. Another advantage of a secured debt consolidation loan, you can easily get an advance when you want, which is not the case with an unsecured debt consolidation loan.