Low Interest Rates: Get a Secured Debt Consolidation Loan Now

Michelle Tuvey Michelle Tuvey | Loan Underwriter

Two different news stories published in mid-February are very telling in terms of UK consumer debt and how people are handling it. From our perspective, both stories indicate that now could be the best time to get a secured debt consolidation loan in order to wipe out high-interest debt and regain control over household finances. If you are struggling with your own debt right now, pay close attention to what you read in this post.

On 21 February, Financial Reporter's Rozi Jones published a piece detailing the rise in debt consolidation borrowing the month before. According to Jones, the number of people searching the term 'debt consolidation' online hit its highest level since the third quarter of 2012. Combined with actual statistics from mortgage lenders, Jones' research showed that people are borrowing more via secured loans in order to pay down their debt.

Two days earlier, the Express published a piece by Harvey Jones that discussed the idea of retiring your debt now while interest rates are low. The article was based on data that suggests one-quarter of those planning to retire this year will do so with an average of £24,300 in debt hanging over their heads. Only one-in-five said the same thing last year.

Your Future and Present Linked

It's not often most of us link the future with the present in a way that is fluid and logically connected. Financially speaking, we live the present here and now while we put off the future as long as we can. That's a problem. All the retirement planning in the world isn't going to reap the kinds of results you want it to if steps are not taken to eliminate current debt loads.

Imagine your financial adviser encouraging you to put away 25% of your income, through pension investments, for the remainder of your working years. That all sounds well and good, but you have a number of high-interest credit cards and a personal loan that have to be paid off first. The best you can do is 10%. Having to service that debt has the result of robbing your pension of money you will need to retire on. And the longer it goes on, the worse things get.

One way to make the best of the situation is to get a secured debt consolidation loan that will enable you to pay off that high-interest debt more quickly and at a lower cost. The sooner you get it retired, the sooner you can increase your pension contributions. Your future will be made better by improving your present financial situation.

Borrow While Interest Rates Are Low

Whether you are approaching retirement with tens of thousands of pounds in debt or you are a young worker just getting started, the time to get a secured debt consolidation loan is when interest rates are low. Remember, the point of debt consolidation is to take advantage of low interest rates to pay off other debts with higher rates. Common sense dictates that you want to get a loan in place before interest rates start going up again.

Why are interest rates so important? Because interest makes up the largest share of the amount you spend to borrow. Just a difference of one percentage point can mean savings in the thousands, depending on the size of your debt. Now is the time to get a secured debt consolidation loan if you're struggling under the weight of high-interest debt. Do it now before the base rate starts moving upward.

Sources:

  1. Financial Reporter – http://www.financialreporter.co.uk/finance-news/debt-consolidation-soars-as-lending-hits-record-levels.html
  2. Express – http://www.express.co.uk/finance/personalfinance/769250/debt-advice-credit-cards-bills-loans-interest-rates

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