Are you interested in debt consolidation?

Earlier this month we shared a link to a BBC article offering tips on how to manage your January debt. This generated a great deal of interest and reiterated our previous messages that maintaining payments and avoiding increasing debt were key.

They went on to say that you should prioritise your debts in to high (mortgage and loan payments, utility bills, council tax and TV licence) and low (credit cards, store cards, overdrafts, personal loans and deferred credit)

If you are struggling to manage to pay your high priority debts, the first thing to review is your mortgage and check if you are on the best deal for your circumstances. With the Bank of England base rate now at 5.25%, many fixed-rate deals have become more competitive and you may even save money by switching products or lender. Checks the deals for your energy supply and also the rates you pay on your credit cards and loans .

Review your non-essential spends and ask yourself if they are really necessary? Money drifts away on additional TV packages, gym memberships and repeat deliveries. Do you need to limit the number of takeaways you order and can you reduce your spend in the pubs and restaurants. Every saving helps balance the January debt.

See if you qualify for state assistance. Cold weather payments, winter fuel allowances or other benefits provide vital support. Don't be too proud to ask and check eligibility for help online.

Finally, protect your credit rating as this influences mortgage and finance eligibility. Avoid missing payments on any bills and try to catch them up in the same month if you do. Your credit rating is crucial and speaking to your lenders upfront is always best if you are struggling. They may be able to arrange reduced payments for up to six months or extending your current term to reduce payments.

Sometimes the best option is to consolidate all of your credit in to a mortgage or a secured loan. This will typically attract a lower rate of interest and give you a longer term to repay it over. With careful planning and expert support, you can successfully consolidate what credit is expensive and increasing and keep those that are low interest, interest free and reducing. Please contact us if you need help identifying  what options are available for your situation and rest assured, all of our advisers follow industry best practices and adhere to the standards introduced in the new Mortgage Charter.