Debt Consolidation Loans, IVA's and Debt
Management
The financial world knows plenty of abbreviations and
'technical' terms. From IVA's to Debt Consolidation
Loans, the following FAQ should help you understand some of the most common
concepts in the world of loans, credit cards and mortgages!
- Debt
Consolidation Loans do what they say on the tin. The
consolidate multiple debts into one loan. Meaning you will have one
repayment per month which covers all.
Debt Consolidation Loans are often secured loans, meaning you will
need to put an asset against the money
lending, usually your home, just like with home owner loans. Getting a
secured loan is always a big decision and having a look at our article
about secured and unsecured loans will give you some useful tips with Unsecured and Secured Personal Loans. Also check out our consumer reviews of various debt
consolidation loans to make sure you go with the right company with our Debt Consolidation Loans Reviews
- An
IVA is an Individual Voluntary Arrangement and is a less restrictive
alternative to bankruptcy. An IVA in the most basic terms is an
arrangement between you and your creditors that entails you to pay back a certain
percentage of the debt you owe, usually over a 5 year period. All this is
done under supervision of an insolvency practitioner. Any debt still
standing at the end of the 5 years is usually written off or forgiven.
Although this sounds great, there certain
things you need to bear in mind. Any assets you have and savings will be
under scrutiny by the IVA practitioner. The IVA practitioner can charge
high fees for their services, so you will need this money first. As with
bankruptcy there is also a certain stigma, albeit slightly less, attached
to 'getting an IVA' and some people as a result fear their reputation
amongst family, friends and acquaintances. There will also be consequences
for getting future credit. Nevertheless in some cases
IVA is still the best thing to do as struggling with debts for longer can
only make things worse. Here at Review Centre we have a variety of IVA
reviews written by consumers like you to help you pick the best IVA (individual voluntary agreement)
- Debt
management can help you make sure your income and expenses add up and therefor reduce the need to borrow more money. Debt
management means putting all your debts in an order, based on priority and
necessity and applying to your creditors with your debt management plan.
If you're successful in your application, it means that interest is often
frozen, ensuring that the amount you owe no longer increases. Charitable
agencies such as the Citizen's Advice Bureau and National Debtline can help you apply for debt management. In
recent years there has also been an increase of fee-charging agencies that
take your money and then pass it on to cover the various payments. These
agencies usually charge around a 15% fee as well as administrative cost.
As a result of this it will take you longer to get rid of your debt.
Something to bear in mind! However it does mean you don't deal with your
creditors. Nevertheless charitable agencies can do this for you too, just
ask! Organising a debt management solution will show in your credit
history and could affect your future borrowing plans. Also keep in mind
that your application might not be accepted by the creditors or that they
will necessarily freeze interest payments. Making use of a debt management
plan is generally best if you know that your financial situation will
improve, which enables you to pay your debts sooner. If you don't think
your situation will improve then it is best to look for other options and
advice. Also remember that fees and interest charges from debt agencies
could actually increase your debt!
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accept any responsibility for any loss, damage or injury that may arise from
using the information on this website. It is your personal responsibility to
confirm the accuracy of the information on these pages before you take any
action based on this information.
