A Bad Economy Means Bad Personal Debt, How to Grab It By The Collar and Get Control

Recent official government figures have shown that the economy in the UK continues to struggle.  While the worst of the recession may be over, the recent GDP reports showed a ‘picture of continued weakness in the UK economy’.  Combined with rises in fuel and energy bills, public sector spending cuts and wage freezes, many households in the UK are struggling to pay their monthly commitments.

A national financial education charity, Credit Action has also reported that the average household debt in the UK is £8,144 (excluding mortgages).  Including households with some form of unsecured debt, this figure leaps to £15,661.

The charity’s figures also reveal that each day in the UK 1,392 people will be made redundant and a staggering 337 will be adjudicated insolvent or bankrupt.

Other debt charities report similar findings.  The Citizen’s Advice Bureau (CAB) recently reported that the average consumer debt for a UK adult was £4,350 and the CAB deal with an average of 8,004 new debt problems every working day in England and Wales.

Most of the unsecured debts in the UK are products such as credit cards and personal loans, which often carry extremely high interest rates. However if you are a homeowner, one option may be to remortgage in order to obtain finance to secure your debts against your home.

This choice has the extra strength of allowing all debts to be incorporated into one overall monthly instalment, which makes for much easier budgeting and fewer late penalty fees from credit card companies. It will reduce the clutter of bills, loan repayment letters chasing borrowers for money and could also reduce the overall burden of your monthly debt repayment. If like many of struggling people across the country you have taken a pay cut at work or are finding it hard to cope with the widely publicised rising cost of living, this could be a solution.

A remortgage lets you reduce your outgoings and you can also benefit from taking out a special remortgage deal on the total borrowing. You may be able to take a low rate fixed rate and increase your mortgage repayments in the future when your financial situation improves.

When remortgaging to secure debts, it is important that you speak to a mortgage adviser as they will be able to calculate the debt repayments over various periods of time.  You should still try to repay your debts as soon as possible however, as stretching the repayments over a longer period can mean that you could end up paying more.

If you have a less than perfect credit history you may not have the same wide range of remortgage rates to choose from. However, plenty of lenders offer deals even if you have experienced credit problems in the past and you may well find a deal that suits you perfectly.

A remortgage can be a great option if you’re struggling with multiple creditors and lots of loans and credit cards.  In the current difficult economic climate, reducing your mortgage repayments as well as repaying debts at high interest rates could be the solution to your financial troubles. It may also allow you to simplify your finances and to make your outgoings easier to control.

Tags:Best Remortgage Deals,Remortgage,Remortgage Deals,Remortgage Rates,Remortgages

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