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If you take out a debt consolidation Loan, do not treat yourself.
Do not be tempted to add more than need onto the loan, and head for the travel agents.
Many people consolidating debts into one, longer term loan, borrow a bit more and treat this money as a surplus than can by used for non essential spending. Do not be tempted to do this.
Consolidating debts into one loan should be only be done to make your monthly loan repayment lower so can afford to pay back your current debts. It should bot be done so you can afford more debt.
This is a path many have taken and it will only lead to financial misery when you can’t afford your monthly repayments, are 10s of £1000s in debt and you find yourself completely disenfranchised from most financial services.
One Response to “If you take out a debt consolidation Loan, do not treat yourself.”
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September 10th, 2007 at 12:57 pm
Try and avoid consolidation loans with extra on top just to get lower monthly repayments, it is unneccessary and prohibitively expensive. If you owe, say, £20k and need a £5k loan for a new car for instance, it makes much more sense to borrow the £5k on its own.
If you borrow £25k then you are subjecting the whole debt to extra interest for no reason. You can cost yourself 10’s of 1000’s of pounds by doing this, not withstanding also the temptation to use the original debts again.
If you feel you need further debt advice, feel free to call me direct on 0161 905 8813.