At Get Help With Debt, we help people from Belfast and all over Northern Ireland deal with a range of different debt problems. Most of our clients are struggling with credit card and store card debts they can’t cope with anymore, but there are other forms of debt people can run in to trouble with as well.
Overdrafts are another very common form of unsecured debt. They are usually offered by your bank or building society, as a buffer for when you don’t have money in your account. Usually you will be charged a fee for using your overdraft which is then repaid the next time money goes into your account.
Overdrafts can become a problem if you get into the habit of using them and repaying them every month, falling into a situation where you are dependent on the overdraft to provide part of your income. This can leave people trapped in a cycle of borrowing and repaying they struggle to break free from.
An unsecured loan is a form of credit that is usually taken out and repaid over a set period of time, often over several years. Interest and repayments are agreed with the lender when you are applying for the loan. The risk with these loans is that a change in circumstances could make the monthly repayment amounts unaffordable.
Payday Loans are a relatively new form of debt. They allow borrowers to get quick access to a relatively low sum of money to support their finances between pay days, much like some people use an overdraft. Pay day loans, however, carry very high interest rates and must be paid off the following month when the borrower is paid.
The problem with this type of borrowing is that you can easily fall into a trap of living off payday loans each month. Missing even a single payment could quickly leave you in a lot of trouble with high interest charges and the inability to pay the money back, causing the debt to spiral.