It’s easy to get into debt, but it’s really tough to work your way out of the debt trap and get your finances under control again and that’s why I’ve asked a couple of my blogging buddies for their advice. Before I’ll let you in on their finance secrets however, I want to tell you about a debt reduction option that you might not have heard of before: a debt consolidation loan from a peer-to-peer lender. Companies such as Lending Works are one of the most popular peer-to-peer lenders in the UK and what they do is quite simple: They basically match lenders with creditworthy personal loan borrowers and allow them to take out a personal loan at a fixed and low interest rate – other than payday lenders who will probably drive you into even more debt.
A debt consolidation loan has a number of advantages: you can bundle up all your debt in one place, so you just have to pay one creditor instead of dozens and the fixed interest rate ensures that you won’t wake up to nasty surprises one day. If you want to find out more about it, check out this video as it gives you a more detailed idea of how peer-to-peer lending works and if it’s for you.
If you really don’t feel like taking out another loan to reduce your debt, then the following ideas might be able to help you:
Ways to reduce your debt:
Write down all incomings and outgoing so you really know what your situation is – and then be honest with everyone that you owe money to. Don’t tell them you’ll pay something you can’t. Most will be more understanding than you’ll expect – Penny from Being Mrs C
Be very wary of borrowing from friends – such ideas very rarely work out well. Talk to reputable banks, be smart and keep it professional – Becky from Family Budgeting
Take a look at your necessary outgoings i.e. utilities etc. and see if you can save any money by switching to a different company or tariff. Even a small difference will add up over the year and as the saying goes ‘every little helps’. – Sarah from Boo, Roo and Tigger Too
Work out which debt has the highest rate of interest and focus on clearing that one first. – Cass from The Diary of a Frugal Family
If it all feels too much for you speak to the experts. Visit CAB or similar as they have klout and get some debts reduced and help work out repayment plans. – Emma from Mum’s Savvy Savings
Do you have any tips on how to reduce your debt? Would you get professional help or try and do it on your own?
This is a promotional post with an image by Flickr user: Money Images.