What Does Debt Look Like?
Debt comes in many forms and some are unfortunately not treated as seriously as others. Here we explain how even small debts can become big problems.
Priority forms of debt, such as council tax and mortgage or rent repayments, are probably the most common things which spring to mind when talking about owing money. However, few may mention the more everyday types of debt which numerous people live with almost constantly.
To many, these expenses are just part of everyday life and something which is unfortunately usually always there. To others, these debts are treated – and often misused – as a form of lending with no consequence.
The Money Charity suggested this was the case when referring to credit card debt.
Credit card debt – an "inconsequential loan"?
During a study published by the organisation, the firm found that someone would take more than 26 years to pay off the average credit card debt in the UK – assuming that individual made only the minimum payments.
A spokesperson for the Money Charity commented on the findings, stating:
“It is essential that consumers appreciate that credit cards can be a helpful financial tool to be used wisely but mustn’t be treated as an inconsequential loan.
“This stark calculation shows exactly how problematic credit card debt can become if not taken on with a mindset of fully understanding the product, its total costs and affordability, looking towards how it can be managed sustainably by planning and budgeting accordingly.”
It’s perhaps for this reason that 23% of young men, and 25% of young women, are “constantly in debt”.
Although this research highlights just one type of debt, it does shed light on the varieties of different loans out there – some of which are often not taken as seriously as others.
When does debt become a problem?
It’s important to note that there are such things as good and bad debt – although many would not see a distinction. In the case of the former, this is debt which is often needed to help us live good-quality lives. For example, a mortgage is typically essential to get on the property ladder while a student loan is usually a prerequisite for university.
Debt only becomes bad when it becomes unmanageable. Therefore, if you’re struggling to repay your credit cards, and wondering how you can resolve this debt, this would fall into that category.
Don’t worry though because, if this sounds like you, you’re in the right place.
Helping you regain control
Through debt consolidation, we could help you get back in control of your finances – even if you have bad credit. Whether struggling with credit cards or a completely different debt, our team of advisors have heard it all before.
To get in touch with them, and find out if this solution is the right one for you, click on the button below:Regain Control of Your Debts
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.