The Rise of Debt and How to Make It Stop
The rise of debt can be a scary thing but rest assured there are ways we can stop it. We offer multiple solutions that can freeze interests from adding to your total debt level. Seeing your debt level rise due to interest that you never knew about can be dangerous and affect your credit score massively. Here are a few different types of interests.
Annual Percentage Rate (APR) – how this is added to your debt
The annual percentage rate is the amount of your total interest expressed annually on the total cost of the loan. Credit card companies often use APR to set interest rates when consumers agree to carry a balance on their credit card account.
APR is calculated fairly simply. It’s the prime rate plus the margin the bank or lender charges the consumer. The result is the annual percentage rate.
A fixed interest rate is as true as it sounds-a specific, fixed interest linked
to a loan or credit line that, along with the principal, must be repaid.
Since they are simple to measure, easy to understand, and predictable. A fixed-rate is the most common type of interest for customers-both, the borrower and the lender know precisely what interest rate commitments are connected to a loan or credit account. Consider a loan of £10,000 from a bank to a borrower. for instance.
The total cost of the loan, with principal and interest combined, is £10,500, considering the fixed interest rate of 5 percent.
This is the sum that the creditor would pay back.
What will happen if I ignore my debts?
If you miss payments or you don’t pay the right amount, your creditor may send you a default notice, also known as a notice of default. If the default is applied it’ll be recorded in your credit file and can affect your credit rating.
We strongly suggest you not to ignore your debts, However, if you decide to ignore your debt it may result in a few things such as:
- Your credit score will be damaged. You will find it hard to get future credit with other creditors if they decide to run a credit check on you.
- You could have your earnings arrested. An earnings arrestment is also known as a wage arrestment. Your employer is instructed to deduct money from your wages each month to settle the debt owed.
- Sheriff officers may visit your home. They will continue to hassle you until the debt is settled, or a payment plan is arranged.
- Creditors will pester you via phone, email and letters. They will also continue to do so until the debt is settled.
How Solutions Scotland can help
Solutions Scotland offer many solutions that can remove the stress from paying back your debts. From a Debt Arrangement Scheme to a Protected Trust Deed and much more. We have all the right solutions to make your debt manageable, affordable and stress-free. We will also stop ALL creditors from contacting you!
Contact us on 0141 739 8180