Loans Are Not Just For Christmas. Surviving The Holiday Debt Hangover.Posted by Nick Niesen on November 8th, 2010 Christmas is coming - A time for decorations, songs, over-eating, gift giving, visiting the family, consumer spending and the increasing of personal debts. Bah humbug. While most people see Christmas as a joyful period there are many who see it as a time of financial worry as they cannot afford to buy presents for everyone. For these people it is often the doorstep lenders who will be getting fatter rather than them and their family. The temptation is to simply put the expenses on the credit card or take out a loan to be paid back on the never-never. Unfortunately this can lead to disastrous results in the long-term, as the recent increase in the number of repossession order applications are testimony. There are a few simple rules can help to prevent a post festive period financial hangover though. Firstly, don?t ignore the problem. The longer you leave a debt problem, the worse it will become. If things seem desperate then contacting a free organisation such as National Debtline (0808 808 4000) can help by giving debt advice over the phone, or by providing booklets and fact sheets, as well as helping to set up personalised debt management plans. Next, maximise incomings and minimise outgoing expenditures. Look out for anywhere costs can be reduced. Online retailers don?t have to pay for expensive premises, and so buying presents online rather than in the shops is often a great money saver. Be alert for shop sales and make the most of them. If you already have debts, then you need to be wary of borrowing more money without some serious consideration and qualified professional independent financial advice. Taking out a low rate secured loan to cover previously unsecured debt may seem like a sensible idea, however, should you fail to meet the payments you could lose your house. If you have unsecured loans, your home may not be safe either. Debt counselling charities have recently become increasingly alarmed regarding a growing trend by some of the high street lenders to issue ?charging orders? on borrowers? homes in order to recover bad debts. This means that by going through the courts, the lender can change an unsecured loan agreement converting the debt to be secured on the borrower?s house, whilst still charging unsecured interest rates. A consolidation loan may seem sensible; however this will mean borrowing more money, over a longer period this will mean more interest to pay in the long run. If you decide to take out a loan, then you need to ensure that you are getting the best rate that is available. The big banks like Barclays ( http://www.barclays.co.uk/loans-index/ ) have online facilities showing their current rates , and other online finance companies such as Moneynet ( http://www.moneynet.co.uk/loans/index.shtml ) provide free facilities to compare rates for hundreds of secured loans, unsecured loans and even adverse loans. When you look at paying off existing debts, you need to decide which are the most important and deal with your priority debts first. Ensure mortgage and rent bills are covered first, next pay off essential utility bills and council tax, before trying to pay off any unsecured loans. As well as reducing any monetary outgoings, it is also important to ensure that you are getting all the incoming money that you are due. Checking with the local Citizens Advice can be useful for help on debt, benefit, housing, legal, discrimination, employment, immigration and consumer issues. They will be able to advise you on most areas of concern, including whether there are any government payments to which you could be entitled. Debt problems can seem insurmountable at the best of times, but over the Christmas period it can become completely overwhelming. Start by maximising your incomings, minimising your outgoings, and careful budgeting and purchasing. Ensure you are getting the best loan rates through free online information comparison at sites like Moneynet, and speak to free independent advice services like National Debtline and Citizens Advice; it is possible to retake control of your finances and have a happy Christmas. Disclaimer: You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts. Useful resources: Like it? Share it!More by this author |