Debt is never good - but if you are in debt there are ‘good’ places to owe money and others that aren’t good! You have to look carefully at what is known as the APR on your debt – banks provide a better rate than credit card companies. The percentage you are paying is critically important to the length of time it will take you to pay off the debt otherwise you could end up paying several thousands in interest on a relatively small debt of a few hundred pounds.
Prevention is better than cure and with that in mind at King’s we now provide a Debt Advice Centre called King’s Money Advice. Suzy and Carol Bradshaw head that up and have come to us from Sheffield with a wealth of experience in this vital field of debt advice. They will be a really helpful and important resource for many in debt in our area.
If you are going to prioritise managing your debt you may need careful professional debt advice. Some of the loan companies that advertise in the media that they consolidate debts can result in you paying a final interest rate of 4000%. The so-called lower monthly figure means that the period of the loan is extended - in some cases you can be paying off that ‘smaller’ amount for the rest of your life – or it can seem so. Apart from increasing your income and reducing your expenditure you also need to get the interest rate you are paying down as low as possible. I say again - avoid television loan companies!
This series of blogs is based on the annual Stewardship seminar from King's