tips borrowing

Here are some expert tips on how to deal with borrowing issues.

• Get free advice.
• Don’t panic or ignore the problem: unopened bills won’t go away.
• You can’t ignore your debts. Better to pay a small amount than nothing at all – those you owe money to may be prepared to accept low repayments.
• If you’re struggling with store or credit cards, stop using them.
• Work out a realistic budget that covers all your income and spending. Check whether there are any benefits or tax credits you’re entitled to that you’re not getting.
• Decide which debts take priority – like mortgage or rent – and which cost you most through penalties or higher interest rates.
• Only agree to pay off debts at a rate that you can keep up – don’t offer more than you can afford.
• Contact those you owe money to as soon as possible. Let them know that you’re having problems. Many companies will be helpful if you talk to them.
• If organisations won’t accept your repayment offers, seek advice.
• If you get a threatening letter, get advice from your local Citizens Advice Bureau or trading standards service.
• If a debt collector calls at your home, you don’t have to let them in. If you want time to get advice, arrange a later appointment. If a debt collector or lender harasses you, contact your local Citizens Advice Bureau or trading standards service.
• Check if a loan will be secured on your home. If it is and you do not keep up repayments you could lose your home. If you do not understand the terms of a loan, get advice.
• If you’re thinking of taking out a new loan to pay off debt, make sure you find out the total cost of the loan, not just the monthly repayments.
• Think very carefully before borrowing more to pay off your debts. Get impartial advice and don’t rush into signing anything you don’t understand.
• If you are thinking of using a fee-charging debt management company, then make sure you understand exactly what you’re signing up to – check what fees you’ll be paying to the company and how long it will take you to pay off your debts.
• Keep copies of all letters you send and receive about your debts.

• work out a realistic budget that covers all your income and spending
• don’t panic or ignore the problem
• decide which debts take priority
• contact those to whom you owe money.