The following is a brief description of the most commonly used solutions to clear personal debt.

• Informal Debt Management Plans

A Debt Management Plan is a very popular method being used by people in the UK to clear personal debts.  This is because they are informal and allow you to make one monthly repayment to your creditors at an amount and rate that you can afford. 

A debt management company will work out what you can afford to repay and set up a structured repayment plan with your creditors whilst also trying to get the interest and charges frozen or reduced on your outstanding accounts. A debt management plan can go on for as long as it takes to clear your debts and you should be very wary of companies that claim to be able to wipe away your credit cards and loans.

• IVA or Individual Voluntary Arrangement

An Iva will clear your debts in 60 months or 5 yearswith an exact end date.  This is a formal agreement between you and your creditors and has to be arranged by an Insolvency Practitioner, a person who is qualified to undertake and manage your 60 month creditor agreement.

Most people who choose to enter an IVA are people who would not be able to clear debts in a reasonable period of time and who usually owe in excess of £25’000.  An IVA should only be considered if your circumstances are serious and it is unlikely that you can repay your unsecured debts in under a 10 year period.

• Protected Trust Deed (Scotland only)

A Protected Trust Deed is only available in Scotland and is the Scottish equivalent to the IVA in England. the main differences between a Trust Deed and IVA are that a protected Trust Deed only lasts for 36 months or 3 years.

• Bankruptcy

This is the most severe option and is only undertaken in the most serious of personal circumstances.  Bankruptcy in the UK will clear all unsecured debts that are outstanding and will usually last for 1 year, this is the period of which you are considered to be bankrupt and your bankruptcy is supervised during.

After the 12 month period you will be discharged from your bankruptcy and you will find that you will struggle to obtain credit for up to and including 6 years from being discharged.  Some people do obtain lending after being discharged from bankruptcy but the rates they pay for the finance is usually very high.

An individual would apply to their local county court for a petition for voluntary bankruptcy to start bankruptcy proceedings.  Creditors can start proceedings against you to make you bankrupt and you should respond to any court actions they pursue.

• Debt Relief Orders

A Debt Relief Order is a new form of debt relief that has been available since April 2009.  This allows people on a reduced or low income with little disposable funds each month to pay an amount back over a 12 month period.  After the 12 months creditors will usually offer to write off the remaining balances.

A debt relief order is for people who can afford less than £50 per month and owe less than £15’000 whilst having no assets that collectively total more than £300.

• If you are struggling with personal debt problems and have been refused debt consolidation loans, it may be time to consider another option to clear your financial troubles. 
• Why not give Larry the Loan Broker the chance to assess your financial situation and allow a trained consultant to offer you what we call, best advice based on your circumstances.

Call FREE using 0800 118 2345, our lines are open 24 hours - 7 days a week.

Larry the Loan Broker is a registered trading style of Lewis Alexander Financial Management, a company licensed to carry out all activities under a valid consumer credit license. 

Registered under the Data Protection act of 1998, we have strong relationships with most of the UK Banks, Credit card and Loan companies. 

Our service is totally confidential and you are under no obligation to proceed.

Unsecured Loans

Unsecured loans are not secured against any property.  Usually, the rates of interest can be high due to the fact that the lender has no property acting as security should you default on the loan. Unsecured loans are commonly used for purchases such as Holidays, Cars, and Domestic Emergencies.

• Secured Loans

Secured loans are secured against property or items of equal value to the loan. This provides the lender with a secured asset that can be taken from or off you in the event that you fail to repay your loan instalments or the full loan as agreed. Secured loans are used for any purpose but the most common are Home Improvements and Debt Consolidation, personal debts should not be cleared with equity from your property without considering all other debt solutions.

• Payday Loans

Payday loans are only offered to people who are working and this usually has to be full time not part time. The payday loan company will advance you an amount of money that will be deducted from your next salary, the very next date you get paid.  Payday loans are very much like overdrafts and are difficult to clear once you have taken the first one. This is because you need two wage packets in one month, one to clear the loan and one to live on! This does not happen to most people.

• Debt Consolidation Loans

Debt Consolidation Loans are loans that people use to consolidate (put into one) all other credit agreements such as credit cards and store cards, personal bank loans and overdrafts, catalogues and book clubs. Debt consolidation loans are offered on an unsecured or secured basis, however, it is not common to find an unsecured debt consolidation loan for any more than £25’000.  Most loans over this value then require security against a home.

• All of the above loans require credit checks and the rates of interest will all be subject to your personal credit status.

If you have a bad credit rating the cost of borrowing will be higher and your loan/s will cost you more to repay because of the risk presented to the lender of possible none repayment.

If you have a good credit rating the rate of interest should be lower as the lender will be keen for your business. Not many lenders are keen to lend to people with bad credit or arrears on household bills such as Council Tax, Rent, Gas, Electricity and Water.

These are priority living costs and if a lender sees that you are unable to manage these very important bills in an organised fashion, they will not believe that you will manage and prioritise the repayments of the loan you may be asking them for.

• Refused a Loan?

When you are making general enquiries for personal loans and credit, whether it is online or over the telephone, you should be very mindful of certain finance industry facts if you have been refused a loan or credit,

• Not all loan companies will tell you the truth!
• Not all loan companies have the consumers’ best interest at the core of what they do!
• Not all loan companies will be operating above board and compliantly!
• Not all loan companies are lenders, most are brokers and do not even lend money!

If you need friendly loan advice from people who care about your financial future, please contact Larry the Loan Broker today and allow his team to offer you simple and constructive personal loan advice and help.

Call free using 0800 118 2345, our lines are open 24 hours – 7 days!

• Doorstep loan and Cash loan lenders

These short term loans carry a very high interest rate and this is because they are short term.  The repayments can become very high and if you have a financial setback one month, you may not be able to pay these loans and they then things get quite unmanageable.

Lenders you may be familiar with are companies such as;

• Provident
• Shopacheck
• Greenwoods

Most of the above loan companies collect via agents that befriend people and these close relationships make it difficult for people to say that they cannot afford to pay if that should be the case.

It is very common for people on state benefits or disability living allowance DLA to be approached by these types of loan companies and this can be for varying reasons;

• People on state benefits are usually guaranteed an income each month
• People on DLA are unable to move far way quickly or avoid collection procedures
• Basically, only the vulnerable seem to get burdened with these cash loans

When you apply for these loans you will now find companies charging innocent people £50 to search for a loan, it is usually again only the vulnerable consumer that will get caught by these tactics.

Most people that apply for loans after being refused a number of times become the people that get tricked by the greedy companies, this is because the individual has not accepted that the line of credit is broken and no one will lend so the only people that seem interested are the ones that can charge fees for loans that may not come through.

A number of cash loans added together is trouble waiting to happen, all you need is one change in your circumstances that costs you extra money one month, on something you had not thought you would need to spend on and that will be the start of the trouble. 

All your costs will start to mount up with extra charges and late payment fees being applied to your outstanding accounts, this may be what is happening to you right now, if so you need to get help today!

If you need advice on doorstep or cash loans, contact Larry the Loan Broker today for confidential advice on what you may qualify for, 0800 018 2345 your call is free and our lines are open 24 hours.

If you have been searching for loans online for people with bad credit, you will have learnt by now that not all loan companies are the same.

Some are brokers and some are actual lenders, they both however have one thing in common, they can only propose to lend to a consumer who qualifies for the loan being applied for.

When you are applying for bad credit loans you should accept that rates are going to vary from lender to lender and that no loan company is under any obligation to actually lend you any money!

• Your approved application is based on the risk you present to the lender for repayment, can you afford the new loan or credit you are applying for?
• Is there a possibility that if  you have a change in personal circumstances after taking the new bad credit loan that you may default on the new loan and be unable to make your repayments?
• No one has a crystal ball that allows us to see any problems that may arise in the future, such as loss of job, reduced hours at work or loss of income, family death or even a split from partner or divorce.

When a lender looks at your credit report they will see the outstanding bad credit you have now and have had in the past 6 years.  If you lie to a lender before your application is processed, the chances are high that the lender will catch you out at the point of the credit reference check.

Your personal fnancial information is held by credit reference agencies such as Experian and Equifax, all personal loan companies and lenders use this information to approve or decline bad credit loans and most loan or credit card applications.

• When bad credit loan companies offer you a loan you should consider all options available to you first!

It may be that you are suffering with multiple bad debt problems and that the existing credit card and loans you may have are the real problem. 

• Will another bad credit loan really be the solution? 

Are you in a position where another bad credit loan would seem like the way forward but really this is what has got you into this debt trap or cycle of personal debt?  You must break free from this by exploring other debt solutions such as a Debt Management Plan or IVA (Individual Voluntary Arrangement).

Please accept that once you break the cycle of debt you will be able to see how the credit companies and banks are able to keep you within the strong clutches they have that in turn can make you struggle along to meet repayments every week or month. 

• It is only when people find that they no longer have a line of credit available or open to them that a debt solution is actually the best route rather than taking on further bad credit loans as originally thought.

If only they could have seen so clearly before the other debt consolidation loans were taken out.  Some poeple even use equity or savings from property to clear outstanding bills, money debt and bad credit with hard earned funds that should ideally remain secure within a mortgaged property to act possibly as a nest egg or future investment.

For further information about bad credit loans in the UK please contact Larry the Loan Broker today using free phone 0800 118 2345, if you think you qualify, you can apply today.