Consoldating debt

The new laws mean that potential credit providers now have access to more comprehensive information about your level of indebtedness and more specifically, the way you manage your debt.

Until now, credit providers could only see your personal details, credit infringement information and the amount of times you may have applied for credit (assuming that the credit provider made an enquiry).

If you have a debt problem and you intend to refinance your multiple debts by swapping debt for one, cheaper debt, it's essential that you cancel the old credit facilities otherwise there is a risk that you will come to use those facilities again and ultimately find yourself in twice as much debt than when you started.

If you have a debt problem and you intend to refinance your multiple debts by swapping debt for one, cheaper debt, it is essential that you cancel the old credit facilities otherwise there is a risk that you will come to use those facilities again and ultimately find yourself in twice as much debt than when you started.

The biggest consideration should be paid to the affordability of one large loan as opposed to many smaller debts.

In other words, it may be more convenient to have just one big loan, but what is the real cost of that and how does it compare financially to having multiple smaller loans.

Nowadays, since the introduction of the new comprehensive credit reporting regime, potential credit providers can assess your loan application relying upon more detailed information about the way your manage your finances and your repayment history for the past 24 months.

This means that if you have a number of debts and you are finding it difficult to manage all the debt and consequently pay your bills late, this will more than likely affect your credit reputation and your ability to obtain a loan.

You need to ask yourself whether the debt problem you’re trying to address is likely to be permanent or temporary.Consolidating debts may well be the answer to this issue because, by rationalising your many (smaller) debts and having one loan to manage, it stands that it would be easier to juggling your repayments and therefore there is less risk of you paying your debts late and thus decrease the likelihood of any adverse credit reporting.Naturally, there are some consequences which also need to be considered when deciding whether or not to consolidate.One of the first things you should do if you’re struggling with debt is attempting to speak with your creditors and ask them whether you would qualify for .You will find that every financial provider has an obligation to consider an application made by you for assistance or relief.

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