“Credit counselling can help you get on the financial track when you are juggling with multiple debts.”

 

Debt is rising and income is shrinking! It sets alarm bells ringing among all borrowers. Credit cards are maxed out, utility bills are due, debt instalments are overdue, and you are strapped. It is like you are getting into debt deeper and deeper.

When you are running out of money and you encounter an unexpected expenditure, you rush into direct lenders to take out a loan. The quickest loan you can avail with a poor credit rating is none other than loans for bad credit. You use the loan to repay your existing one, but how will you pay off the new loan? Taking out a new debt on and on is not the solution if you want to get rid of debt.

When you are in financial trouble and you genuinely want to get out of debt web, credit counselling can be an ideal solution. Credit counsellors will peruse your credit report, look over your financial situation and accordingly will inform you of the ways of creating a budget, building your credit and paying off your debts. Financial guidance will also help you build up an emergency cushion so that you do not have to rely on short-term loans like payday loans, no-credit-check loans and doorstep loans in Ireland.  

Finding the right credit counsellor is imperative

Whether you are taking out a loan or taking financial advice, every time you are likely to be spoofed by scammers. Bear these points in mind while seeking a financial advisor:

Online research

Do online research and go through directories, local and national newspapers to make a list of financial advisors. If you find an advisor online, make sure that they provide the service you are looking for. Your friends and family can also help you find a renowned advisor. If someone has trust in the advisor, it will save your time in research. However, the advisor might not fit your circumstances even if it was right for your family and friend.

Approved by FCA

If you have found an advisor, you should check whether the Financial Conduct Authority (FCA) approves them or not. Use services of only those advisors who are registered with FCA. Otherwise, you will not be able to avail the financial services compensation scheme if things go wrong. Never respond to emails and telephone calls as they might be from scammers. Financial advisors who follow the best practices will never send you text messages and emails.

Is there any other alternative?

Credit counselling is undoubtedly helpful, but it cannot be a suitable solution to your circumstances. Maybe your financial situation is likely to be beyond what your counsellor can handle. Or maybe your credit card companies and lenders are not ready to go against the contract. Whatever the case, you have to manage your debt on your own. You can either borrow money from your friends and family or take out a secured short-term loan at lower interest rates to settle all of your debts.

If your financial situation is dire, bankruptcy is the last resort. However, it does not release you from all of your obligations. You should do enough research in advance otherwise you will be ruined. For instance, if you have taken out a secured loan and you declare yourself insolvent, does not mean that your lender has lost the right to hold a lien. Therefore, it is crucial that you know the consequences of declaring yourself bankrupt.

You need to be very careful while seeking financial assistance as it has its own pros and cons. The rule of thumb says you should get on the right track as soon as you realise you are getting into financial trouble.