Consolidation Loan - Coping with Change

How do you cope with debt when fate deals you an unlucky blow? It's not easy managing money as it is, and it can be a bewildering minefield of consolidation loans, secured and unsecured loans, remortgaging and credit card offers. How do you know which will help you sort out your debt, and which will exacerbate it?

Coping with debt

If you are on the precipice of balancing your debts and falling into an uncontrollable spiral of debt it's a dangerous place to be - especially if your circumstances suddenly change. A consolidation loan can be an easy way of simplifying your debts and making them more manageable on a month by month basis if you do have to cope with change. Circumstances that could push you into uncontrollable debt could include:

• Long term sickness or a disability that impacts on your employability or where you have to live off benefits that are less than your previous salary
• If you are starting a new family - having a baby is an expensive affair, and the cost of children increases as they grow up. A consolidation loan might be a way of managing debt while preparing for a new arrival.
• A family bereavement can have a massive impact on your day to day functioning and can impact on how you manage practicalities such as finance and on your performance in the workplace.
• Relationship breakdown - if you are living with a partner and are used to a joint income, you may be considering a consolidation loan.

Changing interest rates

As well as personal circumstances, the economy can change - interest rates can rise, the cost of living can increase, utility bills expand and congestion charges can hit your commuting costs. All these things can impact on your debts. If you are feeling confused by the number of debts and the different interest rates you are paying, a consolidation loan is one way of getting back on top of the figures, and regaining control.

The key to coping with change and debt is:

• Look into debt solutions such as a consolidation loan but make sure you don't borrow more than you can afford to repay.
• Work out a realistic budget.
• Work towards setting up an emergency fund and savings account - ideally you should have enough to cover your lifestyle for about three months. Don't be tempted to dip into it for a luxury holiday! It's an emergency fund!
• Consider taking out insurance to protect against any changes in your income, especially redundancy insurance.
• Get financial advice - You should seek professional help to work out whether a consolidation loan is right for you.

Homebank's mortgage advisors are experienced in helping people finding the right mortgage or consolidation loan to consolidate their debt and are always available to provide debt consolidation advice or to give debt management tips. They could help you reduce your debt to affordable single monthly repayments giving you the chance to get out of debt quicker by reducing your monthly outgoings. Call Homebank now on free phone 0800 052 3604 and see how they can help you.