Worried about the coronavirus crisis? Here are 3 steps you could take right now to help improve your finances.
1. Capitalise on low rates: Is it worth consolidating existing debts?
If you are concerned about existing debt, staying on top of repayments or how much interest you’re accumulating, you may have some options available.
For example, it could also be a good time to consider consolidating your debts. This means combining multiple debts into a single loan or credit card, ideally one with a lower interest rate than your existing debts. At a time of historically low interest rates, this could be one way to save yourself money in interest while making your repayments more manageable.
Two common options are debt consolidation personal loans and credit cards that allow you to transfer the balances from other debts onto a new credit card. Below we have rounded up some of the options on our database for each of these debt consolidation techniques. Remember, though, that once you have consolidated your debt to a new loan or credit card, it’s generally a good idea to pay off the balance as quickly as possible.
In particular, be mindful that credit cards with a 0% balance transfer offer (sometimes with an accompanying fee attached) generally begin charging interest on the balance at a relatively high rate once the initial interest-free offer expires. It could also be a good idea to consider the annual fee or other fees charged, and – if possible – to avoid any new purchases on the card, as the provider could start charging interest on these purchases right from the start.