Could You Afford an Unexpected Expense?
If you don’t think you could afford the unexpected, don’t worry – you’re certainly not alone. In fact, around 15% of Brits have no money in reserve at all!
We’ve all been there, you’re just about managing and then life throws a curveball your way. For example, perhaps your car needed urgent repair work, your pet had to go to the vet, or maybe an appliance broke down.
At the very least, this situation is annoying – but can you actually afford the expense?
Savings in the UK
The Money Advice Service recommends that we have three months’ worth of essential outgoings reserved in case of emergencies. For example, if your rent, bills, food etc. totals around £1,500 a month, you should have about £4,500 you can use.
Let’s be realistic for a second though. Saving this amount is beyond difficult – for many, it is simply impossible.
According to Finder, around 15% of Britons have no savings at all. Moreover, one in three have less than £1,500 kept back. Furthermore, around 40% of respondents blamed a lack of earnings for not allowing them to save.
Although these statistics are certainly worrying, it does demonstrate how many of us struggle to put money aside for a rainy day – or act as a cushion in the event of an unexpected expense. In this situation, debt consolidation could help get you back on your feet.
The problem with budgeting…
Look for advice on budgeting and many websites will simply state you should save as little as you can when you can. The trouble is, when you need funds now to make that essential expense, it feels slightly condescending to say you should have prepared for this months ago.
After all, saving can be exceptionally difficult when you’re living from one paycheck to the next.
If you’re struggling to meet the repayments from multiple creditors though, you might be able to free up some cash through debt consolidation. By taking out a loan equal to the value of your debts, you could repay all these organisations and leave yourself just making one affordable monthly payment. Ultimately, this could cut your monthly expenses – but it’s very important to make sure this solution is worth it before applying.
If you get approved though, you could secure the funds you need to start making these costs – and help break the cycle of not being able to save anything.Get Debt Consolidation
APRs from 5.8% to 89.9%
We are a broker, not a lender.
Unsecured Loan Representative 69.9% APR
Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.
Secured Representative 11.7% APR
If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.