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!