There are very few options that people are fully aware of when it comes to debt in the UK. Many people believe that they must jump straight to bankruptcy if they miss a few payments.
This attitude is especially prevalent among people in the UK who have just had an extraordinary life event such as a job loss or a member of the household pass away. However, there are many other options for people who are in debt, one of the most useful being debt consolidation. Here are just a few of the advantages of consolidation.
Your long term financial history will not be as adversely affected.
Even the people who may have heard of debt consolidation may be afraid of it because of the unfounded rumors that consolidating your debt leads to an automatic pummeling of your credit score. There is nothing that says you will lose point on your credit score automatically upon accepting a consolidation plan. This depends on how your debts are reported, not what kind of plan you are using to pay them off. Because consolidation plans usually transfer debt to a new creditor and take risk away from the old one, there will be no bad reports to consider. As a matter of fact, consolidating debts usually allows an individual to pay down debt more quickly and miss less payments, increasing the long term credit score over time!
Debt consolidation is much less stressful.
Simply having the stress of multiple bills from many creditors in the mailbox removed is enough for some people to get their financial lives on track. Consolidation means that you only get one bill from one creditor. This is much easier to pay off, and it is also much easier to keep track of. You also know when you have to pay bills off instead of having to hire a financial assistant to keep up with due dates and avoid late fees and penalties.
Consolidation may actually give you a longer window in which to pay down your debt.
In some very rare debt consolidation cases, you may be able to get some of the principal from the loan removed. This is not common; however, so you should not rely on this to happen. However, consolidation can also mean that you are given an opportunity for a lower monthly payment. This will extend the time that you have to pay your debt. It will also make your debt payment more affordable for you if you have faced a hit to your income.
No matter what path you choose to financial freedom, you do not have to wait for your bills to pile up and file bankruptcy in order to start making a change. You can start today with a debt consolidation package that will save your finances in the short term and preserve them in the long term as well. You will be able to maintain your credit score and create opportunities for yourself to improve your financial records.