Debt Management Companies
Debt Settlement
IVA (UK)
Government Debt Solution
How To Negotiate Debt
Payday Loans
Borrow Money/Loans
Loan Modification Brokers
DIY Loan Modification
Debt Consolidation Loans
Commercial Debt Settlement
Credit Card Debt
Home Budgeting Software
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Ways To Pay Off Debt
National Debt Helpline
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Debt Negotiation Guide:
Stage OneContact Creditors
Stage Two
Prioritise Creditors
Stage Three
Financial Statement
Stage Four
Make Offers
UK Debt Help:
US Debt Help:
Problem Getting Credit?
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UK Credit Report
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Articles Of Interest:
Self Help Debt
Write Off Debt
Debt Written Off
Christian Debt Solutions
Government Debt Advice
Government Debt Management
Government Debt Solution/IVA Debt Solution
Scottish Debt Advice
How Can Debt Management Help You?
Debt Specialists
Clear My Debt
IVA Debt Solution
Free Printable Budget Worksheets
Doorstep Loans
Do It Yourself Debt Negotiation
Personal Financial Statement
Loans - Get The Lowdown On What Type
of Loan Could Be Right For You
Go To The List Of Recommended UK Lenders
Go To The List Of Recommended US Lenders
Other Pages In The 'Loans' Section:
Payday Loans (OK For Bad Credit)
Debt Consolidation Loans
Homeowner Loans (OK For Bad Credit)
Student Loans
Credit Union Loans
Loan Payment Protection Insurance
Borrow Money | Loans | What Are Loans Good For?
This site is primarily intended to help people with debt problems, so there will obviously be a focus on that in this section too, but loans have a wide range of uses, many of which are nothing to do with tackling a debt problem.
This page will give an overview of some of the main types of loan available, and what these can be used for. Whether you need funding for a major home improvement project, or just a quick cash advance to pay for an unexpected bill, you will find something here to help you. You can follow the links to other pages on this site to find out more about the different ways to borrow money, as well as the other options for dealing with debt.
Using Loans To Solve Personal Debt
Loans are often the first thing people think of when they get into debt. Your problems are caused by not having enough money to pay what you owe, so the logical course of action seems to be to borrow some more to sort out the problem. However, loans are not always the best way to solve a debt problem.
Which debt solution is best for you very much depends on the situation you are in. Using one big new loan to pay off all your old debts is known as debt consolidation. Just to confuse things, debt consolidation is also a term used in the US to mean the same as debt management.
Using loans to pay off existing loans can be OK, provided your new loan is at a lower interest rate, but check carefully in case your existing loan has any charges for moving or paying back early. This could easily wipe out any saving you make and increase your debt.
Borrow Money | Loans | What Are Your Options?
There are many different types of loans and then other ways to solve debt that do not involve borrowing money at all, so it may help to take a look at these various options to help you decide where to go next. The following does not cover all the possible types of loan, but looks at the most common options people use when facing debt problems.
Payday Loans, Or Cash Advance Lending
Main Points:
- Only for small amounts of money, usually up to $1,000 or £750.
- Always very short term - normally less than a month.
- Bad credit report usually not a problem.
- Should only be used for one-off emergencies, not to deal with debt or an ongoing shortage of cash.
Debt Consolidation Loans
Main Points:
- Designed to consolidate a lot of smaller debts into one affordable monthly payment.
- Easier to manage and the monthly payment should be lower than before, but you will probably be paying off the debts over a longer period.
- Can save you money if used properly, but ensure the new loan is at a lower interest rate than the debts you are consolidating.
- Probably not the best solution for larger debts. See below for more suitable alternatives.
Homeowner Or Mortgage Loans
Main Points:
- Only availiable to homeowners
- These loans are legally tied to your home, so if you default on payments your house could be sold to pay off the debt.
- Because your home is used as security, you can usually borrow a large amount of money, and bad credit is less of a problem.
- Can be used to consolidate debts, or for any major expenditure such as home improvements.
Debt Management/Consolidation Plans
Main Points:
- Only normally suitable for dealing with substantial amounts of unsecured debt.
- Not a loan at all, but a re-negotiation of repayment terms with your creditors.
- Usually seen as preferable to a loan as it does not involve taking on any more debt.
- A Debt Management Company sets up this agreement for you, dealing with your creditors on your behalf.
- Interest charges usually frozen or reduced.
- You only have one affordable monthly payment to find.
Debt Settlement/Negotiation (US Only)
Main Points:
- Suitable for very large amounts of debt where you cannot afford the payments of a Debt Management Plan.
- Involves a Debt Settlement Company negotiating with your creditors to agree new repayment terms, usually including writing off a substantial portion of the original debt.
- You just pay an affordable monthly fee, which is used towards paying the settlements agreed.
- Seen as a much better option than bankruptcy when faced with very serious debt.
Individual Voluntary Arrangements Or IVAs (UK Only)
Main Points:
- This is the UK equivalent of Debt Settlement.
- Used for dealing with very serious debt, as an alternative to bankruptcy.
- It is a formal agreement, usually lasting up to five years, which often involves writing off a substantial proportion of your debts.
Loans For Personal Debt - Credit Card Debts
If you have credit card debts that you want to pay off, a loan may not be the best answer. Read the Credit Card pages first. If you choose the right card to transfer your balance to, you should be able to beat the best loan rates. There is the option of transferring your balance regularly to cards offering 0% on balance transfers, but you do need to be on the ball to keep up with this. The alternative is to choose one of the cards offering a low interest rate on balance transfers, which applies until all the debt is all paid off. This is much easier and will be at a lower rate than any debt loan.
If you don't need to borrow much, and you know you can pay it back within a relatively short time (about a year), then you are definitely better off choosing a credit card that offers 0% on purchases for an introductory period. Obviously this is only useful if what you need the money for can be paid for on a card. You will tend to pay more for a short term loan for a small amount, which is another reason to look at cards in this instance.
Loans For Personal Debt - What Is Meant By Unsecured Loans?
Secured (or Mortgage) loans are discussed in detail on the Secured Loans page. Most personal loans that you will come across are unsecured Loans and are generally a safer bet than secured loans. Secured loans are where your home is used as security, so if you fall behind with the loan repayments you can lose your house. If you have the option, an unsecured loan carries a lot less risk, but if you have a poor credit rating, a secured loan is the only way of accessing a substantial amount of money.
Loans For Personal Debt - General Advice When Looking For A Loan
Loans are for a fixed period and most will have little flexibility over the option to repay it early. The longer the repayment period, the more it will cost you in interest, so go for the shortest time you possibly can. When you using a loan for personal debt this is particularly important and can make a big difference.
If you know your credit rating is not good, you could damage it further by applying for cheap loans. These low rates are primarily aimed at people with good credit records, so you are likely to be rejected. Repeated rejections will have an adverse affect on your credit rating and increase the likelihood of you being rejected for credit applications in future.
You can get a Free Credit Report here and find out for yourself if there are any issues with your credit rating.
Apply for the lowest amount you can - the lower the amount, the more likely it is you will be approved.
It may help to draw up a Personal Financial Statement before you apply for any debt loans, to show you what repayment amounts you can actually afford. The last thing you want is to be tied into a loan with repayments you can't afford to keep up.
Recommended US Lenders (see Below For UK)
Lending Tree (US Citizens Only)
Lending Tree are one of the leading online lenders, who cover all 50 states and have a reputation for providing a choice of the most competitive loans in minutes. They provide a wide range of home equity loans, refinancing and new mortgages. You just enter your loan requirements and then over 200 lenders are given the chance to compete to offer you a loan. Within minutes you are presented with up to four offers, which you can then compare.
There are obviously no fees and you are under no obligation to accept any offers of loans. You just complete the simple four stage secure application form indicating the sort of loan you want and personal details such as your salary and social security number. You should be able to answer most questions without looking anything up, but if you are applying for a home equity loan you will need to know the details of your current mortgage, including how much you owe.
To find out who will offer the best terms for the loan you want, just visit the Lending Tree website.
Secured And Unsecured Loans For Bad Credit: Abacus Mortgage Loans
This is an interesting alternative, of particular interest to those with credit problems. Abacus are not direct lenders, but they put you in touch with a list of all the best bad credit lenders and credit card suppliers in the US.
Rather than apply to one company for a loan, with this option you pay a small fee for one year's access to a list of bad credit lenders for personal loans, and providers of credit cards. They have a money back guarantee if you are not accepted for a loan. Visit their website to find out more.
More US Lenders Coming Soon...
Recommended UK Lenders
Borrow Money From LoanFinder (UK Only)
LoanFinder are a broker that can offer a wide range of different types of unsecured loans, from payday loans, standard personal loans, bad credit loans, guarantor loans and even credit union loans. You just complete their online application form and they run your requirements past over 200 possible lenders to find the best loan for you.
The application form should take less than five minutes, but take the time to complete it as fully and accurately as possible in order to ensure that you get the best choice and an accurate match with for type of loan you need. Go to the application form now.
Loan'n'Go (UK Citizens Only)
An excellent starting point for a whole range of loans for people with good or bad credit, though they specialise in helping people who have been turned down elsewhere. They help hundreds of people every day to find unsecured loans of all types and sizes.
There is a simple online application process where you enter the basic information about the loan you want, which should take about five minutes. For the process to work you need to take care to fill in the form fully and accurately. They will normally get back to you with a decision within about fifteen minutes.
To be eligble for help you should be a UK citizen earning over £500 per month and paid by BACs. While bad credit and county court judgements are not a problem, you should not be currently bankrupt or on a debt plan.
To find out if you can borrow from £250 up to £25,000 visit the Loan'n'Go website.
Solution Loans (UK Citizens Only)
Lenders who do not credit check you are hard to find, so I thought it was worth listing this one. Solution loans will lend you between £1,000 and £3,000 without a credit check, by using a guarantor system instead. What this means is that your loan has to be guaranteed by another person. Just complete the simple application form on their website to see if they can help.
