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This article is for information only. It does not constitute advice. Chase Saunders Ltd does not provide services for savings, investments, mortgages or insurance. You should seek advice on these areas from a qualified financial advisor.
Debt-laden borrowers beware
Article Category: Debt Consolidation Help and AdviceDebt-laden borrowers need to beware of the pitfalls if they are thinking of consolidating all their borrowings into one loan.
Moneyfacts.co.uk says although amalgamating loans can sometimes prove the ideal solution, debtors can occasionally be caught out.
One of the traps to watch out for is transferring debts to 0 per cent
credit cards and then continuing to spend using the card.
Moneyfacts suggest that this method of repaying debt is probably suitable for smaller amounts of borrowing, usually up to £5,000 for a term of about 15 months.
Anything larger and for a longer period debtors may be better off transferring credit card balances to a deal whereby the interest rate, although not at 0 per cent, is lower, in some cases, than a personal loan.
Lisa Taylor, from Moneyfacts, emphasizes this point: "The credit crunch has caused the personal loan market to tighten, lenders have withdrawn from the market and rates have seen a continuous increase throughout 2007."
She concluded by saying that borrowers should not be "fooled" into assuming that their current bank or building society would always give them the lowest interest rates available.
For mor information about debt consolidation call our advisors on 08000 122 188 for FREE, no obligation help and advice. Created on 08/01/2008 16:40:49
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