However, there will inevitably be some people who have trouble making their repayments. Even for those who are financially comfortable now, it may only take one or two unexpected costs to change that. Given the current state of the economy, the risk of something like this happening may be bigger than it was in the past.
Salford, Greater Manchester (PRWEB) December 24, 2009
With the festive season fast approaching, most of us will have made a start on our annual Christmas shopping. But for many people, that means getting into debt - and debt experts Debt Advisers Direct warned shoppers to take extra care about how much debt they take on this Christmas.
The company added that for those who do find themselves with Christmas debts that they are unsure how to repay, a debt consolidation loan could provide a convenient means of repaying those debts at a manageable pace - although borrowers should consider the downsides, as well as their other options, before making a decision.
The comments follow a report from Money.co.uk suggesting that in November, 4.7 million people were still paying off debts from Christmas last year.
A spokesperson for Debt Advisers Direct commented: "Many of us will be getting into debt to fund our Christmas spending - whether that's on credit cards, personal loans or overdrafts - and that's not a problem for people who can afford to pay off this debt in reasonably short time-frame."
"However, there will inevitably be some people who have trouble making their repayments. Even for those who are financially comfortable now, it may only take one or two unexpected costs to change that. Given the current state of the economy, the risk of something like this happening may be bigger than it was in the past."
"For that reason, we advise people to steer clear of getting into debt wherever possible. It's a better idea for shoppers to set themselves a strict budget based on how much spare income they have, or savings if they have enough money put aside."
The Debt Advisers Direct spokesperson added that those who do find themselves with debts that they are unsure how to repay should speak with an expert debt adviser to discuss their options.
"The right option for clearing debt depends on the borrower's individual circumstances. A lot of Christmas borrowers will simply have credit card and/or overdraft debts that are manageable enough, but don't have any structured repayment plan. For some people, the temptation can be to make only the minimum payments on those debts, which can mean the debt takes a long time to pay off."
"This is where a debt consolidation loan can help. A debt consolidation loan can pay off multiple existing debts and will be paid back in fixed monthly repayments, so the borrower knows the debt will be paid off within a certain amount of time."
"Not only that, but the interest rate will often be lower than credit card and overdraft debt, although repaying the debt over longer could increase the total amount to be repaid."
"However, debt consolidation may not be suitable for struggling borrowers, so if the debts are a little more serious, they may want to consider an alternative debt solution, such as a debt management plan or an IVA (Individual Voluntary Arrangement)."