When Does Your Debt(s) Begin to Feel Uncomfortable?

We all have our own and unique perspective on life, and how we do things.

That is what makes us all so different, and it would be a boring world as they say if we were all the same.

This also is true in how we handle our personal finances, and one particular aspect of those finances, who we owe money to; how much debt we carry.

Being in debt is not cheap, and some of us recognise this more than others; once again perspective.

You may have to pay high interest rates for loans and credit cards you have, or if you are late or in arrears with payments, charges and fees. It all adds up, and for some having no debt at all is how they chose to live.

When you think about it, do we really need credit?

For some things, like a mortgage to buy a house, yes we do. However, the argument about as to if we need credit cards and personal loans is debatable.

Putting those arguments aside, people can and do find themselves in debt, and many are OK with it. Some feel owing money is a part of life, you keep a balance on your credit card(s), and may have a car on finance, and possibly other personal loans.

This is how we live.

It is only when our debt loads or debt levels reach a certain point, that some begin to feel uncomfortable or begin to worry.

Real Examples of When Someone Began to Feel Worried About Their Debts

Over the years of helping people in debt get out of debt, and also just working with people’s personal finances, we have heard many stories over these years. And some are interesting as one question we always asked clients was, “at what point did you begin to worry about the debt level you were carrying?”.

The answers to this question varied all the way from when I had a balance of £100 on my credit card, to a family that felt £75,000 in unsecured loans and credit cards was OK.

One gentleman stated he was OK with £105,000 of unsecured debt.

£105,000 is an odd amount to be OK with, and then at £106,000, you are suddenly uncomfortable.

Some families stated they began to feel uneasy when they started struggling and juggling to pay the monthly bills.

That is a sure sign of a financial issue.

According to a recent survey, most people are not “worried” about their debt until it reaches £6,000.

Of those surveyed, one-in-six would need to owe more than £10,00o before they began to worry, and for the “average Briton” that level was £6,012.

Salary Finance’s Chief Executive, Asesh Sarkar stated, “In today’s world it is normal for people to have some kind of debt.”

However, these stats are telling, in that people are not tackling their debt until it reaches thousands of pounds, and by this stage it is causing them to worry and may be difficult to control.”

When you’re already seriously in the red, a one-off unexpected expense can cause major issues, leading to missed payments, bad credit and a situation where people are forced to turn to high interest borrowing to stay afloat. When people fail to tackle their debt until it is of significant worry to them, they find it much more difficult to get out of a spiral of debt.”

He adds, “The survey shows that people should be careful they don’t take a wider acceptance of debt as a reason to get out of control with their finances. Not only does this lead to a spiral of debt and exclusion from many normal borrowing routes, but it also impacts on well being, with people more likely to suffer from stress and even depression.

Getting Out of Debt

So once you make the decision that you are uncomfortable with the debt you are carrying, what should you do?

Well….get out of debt.

Put together a plan of action to tackle the issue of your debt, and the first way regardless of what plan you choose to use, is to stop debting!

Stop using the credit cards and overdraft and live on a cash basis, no credit.

There are many ways to get out of debt, and this is by all means not an exhaustive list.

By Yourself: You can get out of debt by yourself and there are many ways, one way is the “snowball method”, which you can do on your own.

The main thing is to concentrate on paying off the accounts by paying more than the minimum payments each month.

Third Party Help: This can be by using a Debt Management Company to help you figure a way out of debt, or possibly using an insolvency route, such as an IVA, Debt Relief Order, or possibly Bankruptcy.

Credit After Being and Getting Out of Debt

Just because you may find yourself in debt and not feeling totally comfortable with the level of debt you have, and even if you have struggled with paying your debts, this doesn’t mean you will never receive credit again.

Having too much debt affects/lowers your credit score.

Not paying accounts on time also lowers your credit score.

Both of which make getting credit in the future more difficult, more difficult, not impossible.

There are ways to get credit again even if you have struggled in the past paying accounts, and/or were in a lot of debt.

The one thing to get from this is to be aware of how much debt you are carrying, and be aware of how comfortable you are with the level of debt you have.

Is £6,000 in debt OK for you, or is a higher or lower amount your threshold for debt?

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.