What is the difference between consolidating and refinancing

Should someone tackle their money problems with a bad credit unsecured loan or a debt solution, such as a debt management plan, personal bankruptcy or an Individual Voluntary Arrangement? Whilst those with good credit can usually get a debt consolidation loan at 8-9%, this isn’t the case for those with bad credit.Missed or late payments and loan default means that bad credit customers represent a huge risk to lenders like Cobra Payday Loans.UK unsecured personal debt, such as unsecured loans, credit card debt and personal overdrafts, currently stands at a massive 0.7 trillion.This mountain of unsecured quick loan debt has reduced disposable income and made it difficult for people to cover their household bills. Debt Solutions Deciding whether a debt solution or a bad credit unsecured loan should be chosen will depend heavily on a person’s credit rating.It involves making a payment of at least £100 to an intermediary who, in turn, disseminates the proceeds to creditors on a pro rata basis.Although a debt management plan doesn’t write off debt, it can result in interest and further charges being frozen.

Once 75% of creditors, in terms of value, agree to an IVA there can be no further creditor harassment.It is possible to write off debt of most varieties, but not taxes, child support, student loans and money accrued as a result of fraud.Most debtors will be discharged after a period of 12 months, although there are a number of negatives, including loss of the family home.(Note: the last variable rate federal student loans were disbursed in 2006.

Since then, all federal loans have been fixed rate.) 3. But beware—this is usually the result of lengthening your payment term, which means you’ll actually have to pay more interest over the life of the loan.

This option doesn’t save you any money, but there are still a few potential benefits: 1.

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