The most costly quarter of the year may have past, but there’s no doubt that for many of us it’s only in January that we come around to checking those dreaded bills and realise the full extent of our festive spending. A recent YouGov survey
suggests that UK households will have spent a staggering £22.3bn on Christmas 2013, with families splashing out £599 each on gifts alone. With all that spending it’s not surprising that many of us are now looking for the best ways to banish the debt in 2014.
iLikeOffers.co.uk has called on three finance experts to find out the best ways to get back in the black.
Have more than one debt and struggling to make the repayments? Then debt consolidation may be the answer for you.
Michael Collins, of Frugal Finance
, suggests that consolidating your existing debts into one can work, but proceed with caution.
He warns: ‘Debt consolidation only works if you are paying less than you were previously, that you can afford the monthly repayments and that you won’t pay more of your overall amount.’
Before you get to the point where consolidation of debts is your only option take steps to change your spending habits.
blogger Jo Withey says the golden rule is to pay off your credit card bill in full at the end of each month. Reduce limits to ensure they cover your essential outgoings and don’t treat your credit card like a loan.
Jo says: ‘There are two main options – switch to a cheaper supplier or take out a personal loan.’
If you think a loan is the answer for you, shop around and be sure to take advantage of exclusive offers available for existing customers.
Karen Bryan, of Help Me to Save, has some great tips to help find the best loan for you.
Be aware of early repayment penalties: It may seem like a good idea to pay off your loan early, but be sure to check for any penalties you might incur doing this.
Check your credit rating: Quoted rates may not be available to you, or may be higher, if you have a poor credit rating.
Choose a short term loan: You’ll pay a lot more in interest if you take over a longer term.
Remember that smaller loans will charge a higher rate of interest
: The lowest rate of interest Karen could find
for a loan of £1,000 to £1,999 was 19.9%. This compares to a loan of between £15,000 and £25,000 which has an interest rate of 6.7%.
Karen adds: ‘The best way to save money is not to take out a loan at all, especially if you are going to struggle to make the monthly repayments and risk getting pulled into a debt spiral.’
For more advice on finding the best personal loans visit HelpMeToSave.com, which outlines the best personal loan offers on the market right now.
New Year Resolutions aren’t just for your fitness and dieting goals. Make January the month that you change your spending habits, and it might not come to debt consolidation.