The secret of debt management is making a plan and sticking to it. Here are some of our best tips on debt consolidation and ways you can help cut debt NOW:

Always remember to Budget:

  • Look at your debts often and in detail. You may not realise how much you really owe. Knowing is half the battle.
  • no one can stop ALL their spending, so create a ‘working budget’ to monitor your outgoings and prevent further debts. Remember to write it down and stick to it!
  • Prioritize your debts - rent or mortgage arrears are always first, then gas and electricity (utilities). Once you calculate whats left over, you can think to pay other creditors. Work out a realistic plan for debt repayment, don’t overextend yourself. Even if it takes years, it’s better than letting it get worse and ignoring the problem.

Compare rates and save:

  • Find out what interest rate you’re paying on loans, overdrafts, store and credit cards. Pay off the most expensive first and close the accounts. And remember to keep up the minimum repayments on the cheaper debt (prioritize based on interest rates).
  • If possible, transfer the most expensive debt to one with a lower interest rate. Many card providers offer six months free or very low interest rates on balance transfers but be realistic about the time it will take to pay off your debt - check the rate you’ll pay when the offer ends. Also, you may find it easier to manage a loan where you pay off a fixed amount each month.

Obtain another loan?

  • Taking out a new loan to absorb smaller, more expensive ones can be a good idea because a single monthly repayment is tidier and more manageable. Just don’t be tempted to start borrowing on top.
  • Interest rates on some debt consolidation loans can be high so you may find you end up paying more in the end. Always check.
  • Missing payments on a new loan could mean risking your home if you are required to provide this as security.


 Don’t ignore it, it’s not going away soon!

  • Don’t ignore your debt problem. Your credit rating can be checked by all companies to see if you have a poor history whether you want a mortgage or finance for a fridge.
  • Missing repayments can seriously damage your ability to get credit in the future and you may end up unable to buy goods on credit or get a mortgage.
  • Act fast. As soon as you think you may have a debt problem contact your creditors to negotiate or lengthen the term of your debts. They will usually be receptive as an escalation of the problem is in no-one’s interest. Check whether your lender is a subscriber to the Banking Code. Lenders who adhere to this voluntary code (like Barclays) commit to considering cases of financial difficulties ’sympathetically and positively’.
  • Ultimately, the alternative is bankruptcy. Usually this means no more credit for many years - a hard way to live in today’s plastic-driven world.

Think about your future, and set a goal!

  • It sounds obvious, but be disciplined and don’t take on more debt or credit than you can afford.
  • Shop around for the best deals and get rid of expensive cards. Remember that while you may be offered a cheaper headline rate, you may pay for it in fees and early repayment charges.