3 Strategies to Reduce Personal Debt Ahead of The Summer

The summer is festival season, a time for frivolity that often comes with something of a price tag. If you’re hoping to enjoy your summer to its fullest, you might be hoping to invest in some of the best summer experiences out there – but you might be struggling to do so on account of your financial situation.

Many of us in the UK are in the same boat, as rising costs have made it easier and easier to slip into debt. To make your summer as enjoyable as it can be, what can you do in the short term to help you get back in the black?

Consolidate, Consolidate, Consolidate

The single most important thing you can do for your debt is to consolidate it. For many borrowers, debt is not all held in one place; rather, it is a combination of credit card repayments, personal loans, and even, ongoing repayments such as for your mortgage.

Consolidating is the process of bringing all your debt under one proverbial roof – usually by taking out a specifically-formulated loan that covers the cumulative value of your debts and overdrafts. Another way to do this might be to remortgage, wherein you use your new mortgage to pay off your loans, and fold that debt into your monthly mortgage repayments – but this can be risky, dependent on the rate of change in interest rates.

Either way, this greatly simplifies your credit situation and helps you avoid creeping interest rates that credit cards might be accruing. It also pulls all repayment obligations into one monthly payment, allowing you better control over your budget. Speaking of which…

Budget Hard

Consolidating debt might reduce the overall rate of interest on your debt, but it will not make your existing debt any smaller. To tackle that in the short term, you will need to address your budget. Understanding your outgoings against your income – and where you might be able to cut back on spending – will help you free up considerable amounts of money for paying down your debts.

Ask for Help

But, while the above strategies are supremely effective for the vast majority of borrowers in the UK, there are edge cases for which this might not be the case. Even with a solid budget plan and the best intentions to consolidate your extant loans, you might find yourself still faced with the task at hand. If you have a particularly dire situation regarding multiple lines of credit, payday loans and finance agreements, it can be especially hard to see the route out from under crushing rates of interest.

At this point, there is no shame in asking for help. Debt relief charities exist for this purpose; they can take the reins on your behalf, with sound advice on how best to structure your debt and unique insights into processes that can help you get on top of your money – including the government ‘Breathing Space’ Debt Respite Scheme that halts interest and collections for up to 60 days.

This is a collaborative post.

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