Consolidating your worries may be solution
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You should not have savings and expensive borrowings at the same time.
If you have money on deposit or other investments, consider using it to pay expensive debt such as credit cards, car loans, credit union loans, etc.
Personal finance expert, Brendan Burgess says it is a bad idea to have savings in a credit union earning interest of 2pc while you have a loan with them costing you 9pc or more.
You could ask your lender for a payment holiday. But be warned: you will end up paying more interest in the long run.
If you decide to ask for a payment holiday, make sure it is on your cheapest debt, but funnel any money you have into repaying your high interest debt.
People with debt problems often look to debt consolidation as a solution. But you should tread very carefully when it comes to this so-called solution.
This is where you have a number of high-interest loans but you decide it will be cheaper to pay them off completely by taking out one low-rate loan, such as a good value personal loan or a top-up loan from your mortgage lender.
However, the problem is that if your new loan stretches over a longer period than some of the original loans, then debt consolidation will cost you more in interest payments.
- CHARLIE WESTON
