Instead of going for some debt consolidation loan or debt consolidation program or service, you may be able to reduce the cost of your debts yourself with some effort and care. You may be able to negotiate better loan terms with your present lenders, or maybe you can switch some of your debt from a dearer card you have to a cheaper card you have.
1. Talk to your present lenders.
If you are finding that your present debts are too expensive, then your best option is first to talk to your lenders. As they will want your debt to be repaid rather than you filing for bankruptcy, they may well be very willing to offer you much better loan terms.
Before contacting your lenders, try to work out how much you need to reduce your debt costs so that you can handle them. If you decide that you need to cut repayment costs for your debts by say 20% or 40% then you can send their customer services the following in a letter or email ;
Re Loan Reference 123456789
Regarding the loan that I currently have with yourselves, I am having some difficulty in affording the present loan repayments.
I could really do with the monthly repayment cost being reduced 40% and would be obliged if you could tell me if there is any way that you could amend my loan to achieve this ?
Looking forward to your considerations,
With regards John Smith
(OR if you prefer you can try the above by phone)
2. Move your debts around for lower interest.
If you have a number of debts, then some have probably got higher interest rates or higher charges than others. In that case you may well be able to switch some of your debt eg from a dearer card you have to a cheaper card you have. Often a credit card will also have a Debt Transfer Offer as '0% interest for first year' for this.
3. Remortgage or get a new personal loan or mortgage.
It may be a bit risky, but you may be able to get a cheap remortgage or get a new low interest personal loan or mortgage without mentioning debt consolidation. Many people say that loan money or extra loan money is for home improvement but use some for home improvement and some for debt reduction and are rarely found out.
- See more at: https://web.archive.org/web/20140720100540/http://www.unsecured-debt-consolidation-loans.com/diy-consolidation.html#sthash.xfTke062.dpuf