Borrowers advised to budget for Christmas
Christmas can be an extremely expensive time of the year, and the credit card bills can spiral
Financial solutions company Think Money has advised anyone covering the cost of
Christmas on credit to make sure they have a carefully considered plan in place to repay
what they owe.
With Christmas being one of the most expensive times of year, it’s likely that many
people will turn to credit cards, personal loans and other lines of credit to cover their
seasonal spending. And with the base rate at an all-time low for over two years, there’s
every chance that borrowing money will be an increasingly attractive option for many.
However, there are concerns that borrowers who don’t plan ahead financially, or have a
well-thought-out budget, could face debt problems as a result.
A spokesperson for Think Money commented: “Financial planning is as important as it’s
ever been - especially when it comes to borrowing money.
“[...] Some people might be making a New Year’s resolution to get their finances in
order. For some, that might involve taking out a debt consolidation loan to simplify their
finances and set out a clear plan for repaying their debts. This can be a good way of
managing debt, but borrowers still need to make sure their repayments fit in with the rest
of their budget.”
How to Deal with Loan Sharks
Loan sharks can be risky business if you end up using them
In these troubled financial times, you may be tempted to borrow money from a loan shark just to make it through to your next payday. Unfortunately, once you are involved with this type of loan, it can be very hard to get out of it. Loan sharks are notorious for adding to your principle for no reason; upping your interest and generally making it so you have no idea how much money you actually have to pay them to be done with them.
So, in the end of it all you will realise that all that you have went through was not worth the little amount of money that you needed. The good news is you do not have to handle the situation alone. There is a national hotline available for anyone who is in trouble with a loan shark. You can call 0300 555 2222 or text ‘loan shark’ and your message to 60003. Your call will be kept confidential. Remember, you are not in trouble with the law for borrowing money, but it is illegal for them to loan the money to you without a license from the Office of Fair Trade.
While you are not legally bound to repay any money you borrowed from a loan shark, you may find they are threatening you with physical harm. If you are being threatened or harassed in any way, it is important for you to not only report them to the Illegal Money Lending department and contact the police.
Any time you borrow money, be sure to get all the details in writing. If you are not sure, contact the consumer Credit Public Register to make sure they are licensed to loan money. If they are not, report them immediately. If they are licensed, you may still want to shop around. Be sure you are getting the best deal you can before borrowing money.
There are licensed agencies that will lend you money even if you have a poor credit rating or a low income. You will have to pay a higher interest rate than someone with good credit does, but you will be building your credit if you make your payments on time. In the long run, you will benefit from going through the steps instead of dealing with a loan shark. However, ultimately the decision remains up to you but these are just some words of wisdom.
Top Money Management Tools to Help Manage your Debt
Debt can be confusing. You borrow a certain amount of money, but then have to pay back much more. Interest may be calculated annually or monthly. In most loans, you are paying off any interest first, and then anything left comes off the principle. If you want to figure what the best way to pay off a debt is, or how long it will take you to pay of a credit card if you only pay the minimum payment, there are tools to help you. Below, you can find some of the different tools that are available which have proven to be rather useful to other individuals like yourself.
1. Credit Card Pay-Off Calculator - This tool will give you an amortization schedule. You can figure how long it will take you to pay off your card if you keep the same payment monthly. You can use this to see how much interest you can save if you pay just a bit more each month, taking it right from the balance due.
2. Citizens Advice Bureau - The CAB has people who will sit and help you with a number of problems. The can help you to sort out your debt and determine which needs to be paid urgently. You will learn how to talk to your creditors to have them lower your payments or interest.
3. Credit Consolidation Companies – These companies talk to your creditors for you, making arrangements for a lower pay –off by eliminating late fees and high interest charges. They will lump your debt into one loan and have you pay it off that way.
4. Personal Finance Software – If you can see exactly where your money is going, you can take charge of it. Often the problem lies with the little things we forget about. You may not realize how much you are spending on fast food because you only ever spend £1 at a time. Over the course of a month, it all adds up. Using software that tracks your every expense may be your first step towards financial stability.
5. Budgeting software - Once you understand how you spend your money, take charge and budget your spending. Be sure to stick to the budget by using a variety of limits and tracking to keep your spending in check.
Taking charge of your finances may hurt at the start, but in the end, you will be much better prepared for the little emergencies that crop up.
