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Everone knows that financial burdens can mount quickly nowadays. Today it appears you are in control, financially, and the next day you’re facing some tough economic problems either due to a changing marketplace or changes in your own personal finances. All of the sudden you can go from feeling confident and feeling secure about your financial position to being unsure and worried about exactly where you stand. When it looks like that you’re running into trouble and you find your credit score is starting to slide as payments fall behind, you may consider a debt consolidation loan. In some cases, if your financial condition has become particularly difficult, you may determine that a bad credit debt consolidation loan is necessary to help get your head above water again.

When you think about it, the old adage you often hear is that “the only people who can get credit are those who don’t really need it”. And in a sense, that has some truth to it. Those who once were riding high with excellent credit can find that they’ve fallen on hard times, and their credit score is affected by the late payments or inability to re-pay a loan obligation. That’s when people start to realize they face a problem with the credit, and begin to consider a bad credit debt consolidation loan as an alternative. In many cases, such loans can be a lifesaver.

When payments to creditor begin to fall behind, you may find your credit rating falling right along with them. You may feel that it’s time to turn to a debt consolidation loan as a way to climb out of your financial hole, but because your credit score has taken a dip, you may find yourself facing the prospect of a bad credit debt consolidation loan as your first choice. If you venture into the financial market, you’ll quickly find that there are many loan options available, depending your current credit rating situation. If you have equity available in a large asset, such as a home or a vehicle that has been paid off, you may find that you’ll be able to secure a consolidation at a lower rate because you will be able to provide something tangible as a way to secure the loan.

If you’re where you are unable to provide equity to secure financing, you may face the prospect of considering a bad credit debt consolidation loan that does not require any security. In many cases, these loans will be at a higher rate, and may include a series of fees that a secured consolidation does not. Never the less, if entered into with care and caution, a bad credit debt consolidation loan can provide you a method to avoid serious financial consequences.

Responding to new figures from the Bank of England showing that the most common types of savings accounts now offer the lowest rates on record, debt management company Gregory Pennington has advised consumers that savings should still be a very important aspect of most people’s finances, and added that they should not be discouraged by low interest rates.

In February, the Bank of England made the unprecedented decision of cutting its base rate to 1% - the lowest in its 315-year history. It was a further attempt to encourage lenders to offer credit at lower rates, as well as an incentive for consumers to spend rather than save, which would increase cash flow within the national economy.

However, the decision to reduce the base rate was met with some criticism from a number of analysts, who claimed that base rate cuts are no longer an effective means of combating the economic downturn. They argued that base rate cuts would only serve to disadvantage savers, since the interest rates on offer are now significantly lower than the rate of inflation - meaning that savers are 'losing' money in real terms.

Take the following example: if a saver puts Pounds Sterling 5000 into a savings account with a 1.5% interest rate, they will make an additional Pounds Sterling 75 interest in a year. At present, a 3.1% inflation rate would mean that the average price of goods would rise at more than double that rate - so in terms of purchasing power, the savings would be worth less after a year.

A spokesperson for Gregory Pennington said that although there has been some concern raised about low interest rates, it should not prevent people from making savings.

“The way the fall in interest rates has been reported almost seems to suggest that it is no longer worth making savings, but that is not the case,” she said. “A large proportion of people who put money aside are not doing so to make more money - they are doing it because they want to save their money for a later date. In this sense, savings would even be worthwhile if the interest rate was 0%.

"Even when interest rates are high, it might very well take a very large amount of money to make the interest a significant incentive. We advise consumers that savings should be an integral part of most people’s finances, since they provide a financial ’safety net’ that can be a lifeline if any financial emergencies arise.

"The only realistic situation in which savings should not be a high priority is if the consumer is struggling to repay debts. Debt repayments should always be the highest priority, since debts often grow a lot more quickly than savings do. The long-term consequences of not repaying debt also tend to outweigh the benefits of saving.”

The spokesperson added that anyone in trouble with their debts should speak to their lenders, as well as a professional debt adviser, in order to discuss their options.

“In many cases, lenders will agree alternative repayment plans, or brief repayment holidays, to let the borrower get their finances back on track,” she said. “If that doesn’t solve the problem, then it may be time to speak to an expert debt adviser for a more specific debt solution.

“There are a number of ways borrowers can manage their debts, such as a debt management plan, debt consolidation loan or an IVA (Individual Voluntary Arrangement). Getting debt help from an expert adviser can help borrowers to establish the best debt solution for their needs.”

Gregory Pennington offer debt management plans as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.