Lenders are constantly looking for new ways to make their products and services as attractive as possible. This has led a large number of individuals to borrow money that they used for anything from medical emergencies to home renovation projects and the purchase of electronics and vehicles. It is safe to say that most individuals have taken out loans and used credit cards quite often. This, however, may have left some with relatively large debts that need to be repaid. While this would not have been an issue under normal circumstances, the current Covid-19 pandemic has reduced the income of families from all over the world, making it considerably more difficult to manage the debt while also taking care of regular monthly expenses.
This situation may seem daunting, but it does not have to be so. Managing a lot of debt during the pandemic is more difficult than it would normally be, but it is not impossible. Here is what you should do:
Look for Help from the Government
All governments from around the world, including that of the UK, are offering financial help to individuals who have had their income reduced as a result of the pandemic. Most of this help can be accessed directly from the lender. However, if you have borrowed money from a private lender, you may have to go to gov.UK and look for what help program fits you best. Keep in mind that, in most cases, these programs will not effectively help you repay the money, but put the monthly repayments on hold or reduce the interest rate attached to your loans.
It is also worth mentioning that additional help may be available to individuals who are currently claiming income-related benefits and pension (with the exception of unemployment benefits).
Refinance Your Loans
All banks and a large number of private lenders offer borrowers the option to refinance their loans. This is great if you are having difficulties repaying your debt and would like to spread the payments over several more months. This having been said, please keep in mind that some banks may not allow you to refinance more than one loan at a time, making it important to first look at your debt and choose the most expensive one. Most borrowers will be able to have their loans refinanced in under one week, which makes it a great quick fix for those who cannot keep up with their expenses. However, make sure that the refinancing does not turn your fixed rate loan into a variable rate one or you could end up having to pay more than you bargained for.
Get a Debt Consolidation Loan
Debt consolidation loans can be extremely useful for individuals who are finding it difficult to manage multiple types of debt. These loans are offered by most banks and are usually large enough to repay at least one form of debt in full. If you have taken out one or more loans, have credit cards that need to be paid off, a mortgage, along with other forms of debt, getting a debt consolidation loan is the best course of action.
One of these loans should be enough to help you repay several types of debt, from personal loans to credit cards. However, take into consideration that a personal consolidation loan needs to be secured against the borrower’s property, usually his home. This means that that will be more paperwork involved in the loan application process as well as additional expenses. Generally speaking, a request for debt consolidation takes up to a month.