Its safe to say that British economy has seen better years. In fact, the years ahead look rather bleak for the UK. The strength of the pound, reduction of the number of people in work and austerity measures are all causes for concern and are all impacting a high percentage of the population in some way. You might have found it difficult to afford your weekly shopping, pay your utility bills or just found it hard to make ends meet every month.
Whichever situation you find yourself in, its safe to say that the total figure of families slipping into debt in Britain is getting larger annually. Most financial services companies have recorded an increase in the number of families coming to them with debt issues. By sweeping debt problems under the carpet, you are simply making the problem worse - your debt should be controlled.There are a number of ways in which you can control your debts, these include:
Try And Pay Back More When You Can
If you find yourself with some unused money towards the end of the month, then one option would be to use this money to pay back your debts earlier, if it is permitted.Having large quantities of debt will hurt your finances as the interest will be compounding. Pay off your big debts quickly to avoid the interest from rising.
The high interest debts should be tackled first by overpaying it by an amount you can afford.
The interest rate is just one reason why you should consider overpaying debts.If you experience financial problems in the future and all of your debts have been dealt with by overpaying them, then this will be one less thing to be concerned about.
If you are going to be overpaying your debt, make sure your clear about the terms set out in your contract. Creditors will sometime add a charge for paying back a debt too fast.
If you require additional details about getting a debt management plan you can always contact a reputable firm.
Sunday 26 September 2010
Friday 24 September 2010
Drawbacks and Benefits of Debt Management
If you are finding yourself struggling with debt problems every month, then one financial solution you could use to help is a debt management plan. A DMP is a flexible agreement with your creditors, enabling you to make lower monthly payments based on what you can afford. The intention of a debt management plan is to get you out of debt as quickly as possible.
As with most debt solutions, debt management plans have their advantages and disadvantages.A debt management plan will have a big impact on the way you manage your finances, and you will have to set a fairly strict budget therefore it is important you understand this before going ahead.
Benefits of a debt management plan
- Puts in you control of your finances and debt
One of the main features of a debt management plan is that you will pay back your monthly debts at a realistic, affordable level. Your creditors must agree to this with your debt management company. When making your monthly payment towards your debt, you will be left with enough money for rent and living expenses whilst paying as much as possible to get your debt cleared. Your debt management company will ensure that your payments will be affordable and realistic.
- Should meet your needs and change with your financial circumstances
Often, debt management plans are seen as good option for people in debt as they are more flexible than certain solutions such as IVAs. Because they are not legally binding there are no legal commitments. If your financial situation changes somewhat, then you are able to adjust your payments.
- It is possible to get penalty charges and interest frozen. Your debt management company will engage in negotiations with your lenders and try to get them to freeze any costs so you can focus on paying the debt itself.
Drawbacks of using debt management
- It could impact your credit rating
When you engage in a debt management plan you will be paying the debts back at a different rate than was initally agreed with your creditors. Because you are repaying your debts at a slower, this is what impacts your credit rating. It is possible that your lenders could register a default notice on your credit history. If a default notice is registered, then this could remain in place for upto six years, which means you could have problems getting credit during this time.
- You could end up having less disposable income than before.
A debt management plan will help you pay your debts back as fast as possible, at a realistic, affordable rate. You may find it hard to find money for the luxuries in life, as you will be expected to pay as much back as you can afford. If your income level improves, it may be necessary to use some of this to help pay your debts back.
- A debt management plan is not a legally binding arrangement
There is nothing in the law which says that your creditors must agree to a debt management plan. If they do not believe it is the best way forward then they do not have to accept the terms.
We've touched on just a few of the good and bad points of a debt management plan. For more information about them, check out a reputable provider.
As with most debt solutions, debt management plans have their advantages and disadvantages.A debt management plan will have a big impact on the way you manage your finances, and you will have to set a fairly strict budget therefore it is important you understand this before going ahead.
Benefits of a debt management plan
- Puts in you control of your finances and debt
One of the main features of a debt management plan is that you will pay back your monthly debts at a realistic, affordable level. Your creditors must agree to this with your debt management company. When making your monthly payment towards your debt, you will be left with enough money for rent and living expenses whilst paying as much as possible to get your debt cleared. Your debt management company will ensure that your payments will be affordable and realistic.
- Should meet your needs and change with your financial circumstances
Often, debt management plans are seen as good option for people in debt as they are more flexible than certain solutions such as IVAs. Because they are not legally binding there are no legal commitments. If your financial situation changes somewhat, then you are able to adjust your payments.
- It is possible to get penalty charges and interest frozen. Your debt management company will engage in negotiations with your lenders and try to get them to freeze any costs so you can focus on paying the debt itself.
Drawbacks of using debt management
- It could impact your credit rating
When you engage in a debt management plan you will be paying the debts back at a different rate than was initally agreed with your creditors. Because you are repaying your debts at a slower, this is what impacts your credit rating. It is possible that your lenders could register a default notice on your credit history. If a default notice is registered, then this could remain in place for upto six years, which means you could have problems getting credit during this time.
- You could end up having less disposable income than before.
A debt management plan will help you pay your debts back as fast as possible, at a realistic, affordable rate. You may find it hard to find money for the luxuries in life, as you will be expected to pay as much back as you can afford. If your income level improves, it may be necessary to use some of this to help pay your debts back.
- A debt management plan is not a legally binding arrangement
There is nothing in the law which says that your creditors must agree to a debt management plan. If they do not believe it is the best way forward then they do not have to accept the terms.
We've touched on just a few of the good and bad points of a debt management plan. For more information about them, check out a reputable provider.
Sunday 5 September 2010
Debt Management Plan for Secured Debts?
No doubt that you may have heard about the benefits that a debt management plan can have. This ranges from the ability to get charges and interest frozen on your debt as well as letting you make lower monthly payments.
When your struggling in debt you need a solution which is right for you, thats why its important to compare and research offers before jumping into anything.
A debt management plan cannot help you pay back secured debts. What it can do, is allow you to make lower monthly repayments on your unsecured debt. This is going to allow you more cash to pay back some of those big secured debts.
Debt Management – The Bottom Line
The intention of a debt management plan is to help you make reduced repayments. You can make realistic payments on your debt, and you living costs (food, bills, living costs) will be covered too.
As I’m sure you are aware, this will mean that it will take longer to pay back all your unsecured debts, but your monthly payments will be lower meaning you can use the cash for other things – such as paying off some of that secured debt, for example.
It is also common for debt management plan companies to do their best to negotitate with your lenders for you. They will attempt to get those interest and charges which have been slapped on your debt frozen, which will let you focus on paying back the debt itself rather than the extras which have been added.
Its worth setting out a budget too, so you can figure out exactly where your money goes each month. Many debt management companies will assist you with this, and will also be able to provide more advice and information about debt and controlling your finances in general.
For much more information and debt options, take a browse through a good debt management plan site.
When your struggling in debt you need a solution which is right for you, thats why its important to compare and research offers before jumping into anything.
A debt management plan cannot help you pay back secured debts. What it can do, is allow you to make lower monthly repayments on your unsecured debt. This is going to allow you more cash to pay back some of those big secured debts.
Debt Management – The Bottom Line
The intention of a debt management plan is to help you make reduced repayments. You can make realistic payments on your debt, and you living costs (food, bills, living costs) will be covered too.
As I’m sure you are aware, this will mean that it will take longer to pay back all your unsecured debts, but your monthly payments will be lower meaning you can use the cash for other things – such as paying off some of that secured debt, for example.
It is also common for debt management plan companies to do their best to negotitate with your lenders for you. They will attempt to get those interest and charges which have been slapped on your debt frozen, which will let you focus on paying back the debt itself rather than the extras which have been added.
Its worth setting out a budget too, so you can figure out exactly where your money goes each month. Many debt management companies will assist you with this, and will also be able to provide more advice and information about debt and controlling your finances in general.
For much more information and debt options, take a browse through a good debt management plan site.
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