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Avoiding Easy Debt Solutions

By: Garry Crystal - Updated: 5 Nov 2010 | comments*Discuss
Easy Debt Solutions Credit Lenders Loans

Avoiding easy debt solutions will not only save money in the long term but also help stop the accumulation of more debt. There are many quick fix debt solutions available but most should be avoided on the way to a debt free life.

Quick Fix Debt Solutions

When multiple debt problems arise the easiest route to take may seem like the quick fixes offered by debt companies. Quick fixes can take the form of debt consolidation loans or loans that will give the extra money needed to make repayments on present debts. Desperation will often see logically minded people making bad financial decisions. Lenders are well aware of the pressure that debt problems can place on people and know that the easy debt solutions they offer are tempting.

Avoiding the Temptation

As consumers we are constantly bombarded with easy credit options and this is where debt problems occur. The simple act of buying clothes can lead to opening a store credit card when faced with the temptation of a 10% discount on purchases. The long-term view should be taken when considering any credit options. Credit cards and store credit cards can be extortionate when it comes to interest rates. Impulse buying is made easier when using plastic but these easy buying options can lead to serious debt problems.

Easy Debt Solutions

It is not hard to find easy debt solutions but most will leave the debtor making monthly repayments and interest fees for many years. When people are in debt they tend to panic and take any lifeline that is offered and this is exactly what lenders bank on. Easy debt solutions will come with guarantees of low repayments that they claim will be easily met by the borrower each month. In reality the overall cost of the loan will be high as the repayment periods will be longer.

High Interest Loans

Lenders know that they can charge high interest rates when people have no other options when it comes to borrowing. High interest rates will leave the debtor paying a lot more over the length of the loan. In many cases the overall repayments and interest fees will be a lot higher than the original debt the borrower was trying to eliminate. Lenders will tempt borrowers with the offer of “no credit checks” and no credit checks mean one thing, high interest rates.

Payday Loans

Payday loans are an easy debt solution that many borrowers turn to when they have no other option. Payday loans may seem like a good idea but they are not good as permanent debt solution. Borrowers often think that they will use the payday loan once as a short-term debt solution. The reality is that it is easy to get caught up in the debt cycle of using this type of loan month after month. Interest rates on payday loans can be high and the full amount will usually need to be repaid by the end of the month. Payday loans also have very high charges for late and missed payments.

Consolidation Loans

Consolidation loans can be a good option if the interest rates are lower than the combined interest on present debts. Calculating the amount of interest and overall monthly repayments will help to work out whether or not a consolidation loan is an option. Companies that charge extortionate fees before they will help borrowers should be avoided at all costs. In most cases they will take a fee and then simply direct borrowers to companies that offer loans, usually high interest loans.

Take Advice from Experts

One of the best ways to sort out debt problems and avoid easy debt solutions is to take advice. The Citizens Advice Bureau offers free debt advice and support and can give a range of debt solutions. The Consumer Credit Counselling Service is another organisation designed to help those in debt find the best solutions. The advice they give is completely free and will be tailored specifically to the debtor’s own circumstances. These organisations should be contacted first when debt problems become uncontrollable.

Easy debt solutions are never the answer when it comes to eliminating debt. Companies that offer easy solutions to debt may seem like the ideal option, but they are there to make as much money as possible from their customers. Once the contracts have been signed these lenders will have no qualms about applying exorbitant charges and fees for late and missed payments. Borrowers should look for impartial debt advice before considering any easy debt solutions.

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