Getting out of debt can feel like an uphill struggle. Indeed, when people are in debt they often feel like they are on a slippery slope due to the interest and others fees that accrue on overdue payments. The challenge is that once you start missing a few payments, your financial position can quickly go downhill, which means that so can your credit history!
This article looks at why consolidating your debt by remortgaging your property might be a good strategy to reduce your stress, rebuild your credit rating, and get out of debt in the long term.
There are many people that feel they might not be able to remortgage their property due to adverse credit, however, there are plenty of solutions such as those found here; https://www.jubilee2000uk.org/bad-credit-remortgages that are specially designed to serve those that are plagued with a poor credit. See, for most people, having debt in itself, isn’t the thing that is stressful – because debt that is managed well is an asset in terms of one’s credit history.
The stress tends to come from the debt collection activities that companies engage in when people fall behind and the constant fear about what could happen next — it’s the phone calls, the threat of a ‘home visit’, being pursued in court, and even the prospect of bailiffs coming into your home to remove personal items of value.
Being pursued for debt can be an extremely stressful situation, and often times when people are in a serious financial position they are pursued by multiple creditors with multiple streams of debt collection activity; which compounds and spirals to such an extent many choose to then bury their heads in the sand by not opening letters, avoiding phone calls, and detaching from the situation. However, when it comes to debt avoidance really isn’t the best strategy, it can provide temporary relief but it isn’t a long-term solution.
However, the prospect of consolidating your debt into one larger loan in order to pay off the smaller bits of debt offers immediate and permanent relief from the multiple creditors banging at your door, repairs your credit rating in the sense that you are no longer making several missed payments each month – and presuming you keep on top of the payments for the consolidation loan, it will actually start to rebuild your credit score.
Indeed, one the best ways to reduce your stress is to consolidate your existing debt into one lump sum. This article https://www.moneyadviceservice.org.uk/en/articles/debt-consolidation-loans from the Money Advice Service dicusses the strategic value of consolidating your debt.
The core benefits of consolidating your debt, aside from the obvious financial benefits of avoiding late charges being applied, is that you are now dealing with one creditor rather than several – and rather than having a number of debts with late payments (which can seriously affect your credit score) you now have one debt with payments that are more manageable.
In short, remortgaging your property as a strategy to consolidate your debt is one of the best ways to get back on track; as long as you are in the financial position to keep up with the repayments – as it can give you some breathing room to get back on your feet and seriously reduce the negative impact on your credit report.