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Hi, are there any debt consolidation loans, which are available for people on benefits?

gamma239 - 2009-05-04 00:23:07 - Personal Finance

I can afford to pay off £40 a month. Hi, I would prefer to pay off my debts rather than apply for bankruptcy. Are there any special companies that can offer a loan and be happy receiving £40 a month.

Best Answer:

Before you start going into consolidation loans, make an appointment with the citizens advice bureau who may be able to come to agreements with the companies you owe money to. This wont cost you any fees.

Answers:

I don't think there is sorry, when I tried to find one they all told me to apply for bankruptcy, as I wouldn't be able to pay back the monthly payments.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. (10 years for less than $7,500; 12 years for $7,500 to $10,000; 15 years for $10,000 to $20,000; 20 years for $20,000 to $40,000; 25 years for $40,000 to $60,000; and 30 years for $60,000 and above.) The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased. http://loan-house.we.bs/loanconsolidation.html In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease. The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%. http://loan--house.blogspot.com/2008/03/loan-consolidation.html

Before you start going into consolidation loans, make an appointment with the citizens advice bureau who may be able to come to agreements with the companies you owe money to. This wont cost you any fees.

The fact that you might struggle to get a loan is probably a blessing in disguise, as it is unlikely to be the best solution. Borrowing more money is rarely the best option when you are in debt. Debt consolidation loans are a temporary fix, but they actually put you deeper in debt in the long run. The best long term solution is usually to deal with your creditors directly to find a way to re-negotiate the terms for paying off what you owe them. There is a step by step guide on at http://www.debtassistancesite.com If you need to talk to someone about it, contact your local Citizens Advice.

No you wont get a loan but why not try to get your debts legally cancelled altogether if they are on credit cards or personal loans. I used www.bdebtfree.info and they sorted it for me. You would have more money per month and not need to consider bankruptcy. If the debts you have were not legally drawn up they can be wiped out. You can only try. Good luck.