Debt Problems

If you get into Loan difficulties

Tell the lender

If you are having problems repaying a loan, the first thing to do is contact your lender.

Whatever you do, DON'T HIDE YOUR HEAD IN THE SAND. The problem won't go away.

If you don't let the lender know what's going on they'll assume you're messing them about. Lenders are very well primed to deal with people who don't play it straight with them

A good lender will be sympathetic and reasonable in coming to a new arrangement with you - as long as you're straight with them.

Do make sure your new arrangement is realistic as it won't be taken well if you have to go back to them again. But, if that's what you need to do, don't shy away.

Use the voluntary agencies

If you have debt problems, you'd also be well advised to contact one of the voluntary agencies who can be an excellent source of help such as your local Citizens Advice Bureau.

A good place to go is the Debt Advice Bureau - a not for profit debt advice agency.

There's also The National Debtline. Whether they are a true not for profit agency is unclear. However they seem to have a free telephone advice and support service and also produce a useful free self help guide. Tel 0808 808 4000.

Watch out for any firms marketing themselves to look as if they're non-profit, voluntary type agencies. There's lot of money to be made from arranging "consolidation loans" ie borrowing again to pay off your old debts, and some firms seem to be using this approach. (See below).

Borrowing more to pay your debts: Beware.

Be careful of the many companies around who offer to consolidate all your debts into "one easy repayment". This is all the rage at the moment but these loans usually end up costing you a lot more than necessary.

Brokers make a lot of commission from them so be wary of getting talked into one until you've taken truly impartial advice ie from one of the voluntary agencies.

Incredibly, the majority of people who go for these loans end up even further in debt.

If you've got to the stage of even considering this type of loan, frankly, you need more than a quick fix. Do yourself and your loved ones a favour before it gets worse.

Contact one of the voluntary agencies who really do care and probably know more about loans than many of the so called professionals - before it's too late.