Hello and welcome to Finder's financial self-help series where we swap scented candles for sage money tips and advice. Check it out. Most of us have been raised to think that debt is  a dirty word, when in reality, unless you’re one of the lucky few, debt is just another part of  life. In this video, I’ll talk you through some of the most common types of debt and some tried  and tested ways to get it under control. Debt is money you owe usually to a bank, credit  card provider or some other type of lender.   You get in debt when you borrow money or buy  something using credit. There are interest-free   credit deals around, but typically, when you  borrow money you’ll be charged interest so make   sure you factor that into any repayments. Some of the most common forms of debt   include mortgage debt, credit card debt,  personal loan debt and business debt.   A mortgage could see you borrowing hundreds of  thousands of pounds , so this will likely be the   biggest debt you’ll have to deal with throughout  your life. Because the debt is so large,   your interest charges will add up to a pretty  significant amount over your life.

And because   mortgage debt is typically paid off over many  years, financial discipline is essential.   Whether it’s buying a car or paying for a  wedding, a personal loan can be used for just   about anything. Where a loan is secured against an  asset, like the car you purchased with the loan,   you could risk it being repossessed by the lender  if you don’t keep up your payments. Short-term,   payday loans charge extremely high interest  rates and should only be considered as a   last resort if you have no alternatives. A form of lending that’s boomed across the UK   in recent years are buy now, pay later schemes.  Depending on the provider, these services allow   you to choose from a variety of plans to repay  your shopping balance over a longer period   of time or in smaller instalments.

Be aware  that some plans charge interest and late or   missed payments could impact your credit  score, so make sure you carefully consider   the right plan and service for you. If you’re running a business, buying stock,   expanding into new markets or  hiring a bunch of new people,   often involves borrowing money. So when it comes  to business loans, business credit cards or   other overheads, sometimes the old adage holds  true: you gotta spend money to make money.   To help you get on top of your debt, we’ve set  out actions you can take and sources for help,   for three levels, from minor  through to serious problems.   The first tier is for people who find  themselves in a small amount of debt   but who want to take some smart, responsible  changes today to better manage their payments   and get on top of interest charges. One approach could be to consolidate or transfer   your balance onto a balance transfer card with  a low or 0% interest rate for an introductory   period, like 6, 12 or even 20 months.

A one-off  balance transfer fee usually applies and,   be aware, that once the introductory period  is over, the interest will revert to a higher   rate - so, try and use the low or 0% interest  window as a deadline to pay your balance off.   If you’re struggling to manage one or multiple  credit card debts, try adjusting your payment   plan. Focus on paying one card off at a time,  try and pay more than the minimum each month,   pay off your balance in weekly instalments  and prioritise your credit card repayments   as soon as you get paid. If you’re paying interest on multiple debts   and you’re struggling to make repayments, you  could consider consolidating your debts – perhaps   with a debt consolidation loan or even by  remortgaging.

This way you could end up with   just one monthly repayment and potentially lower  interest rates. Just be aware that consolidating   short-term debt into, say a 30-year mortgage  might be cheaper and more manageable for you   month-to-month initially, but would likely  work out a lot more expensive overall.   If you think any of these options  are the right move for you,   make sure you compare a range of loans and lenders  and only borrow from a reputable lender.   If your debt is starting to feel unmanageable  and the above solutions won’t do the trick,   it could be time to speak to a debt advisor  to work out a debt management plan.   You can get free help from the charity StepChange.  You could also consider using a debt management   service - but this will come with a fee.

You’ll  make monthly payments to your debt management   service, which then distributes your funds between  your creditors, effectively consolidating your   loan. With a debt management plan it may also be  possible to suspend interest on your debt.   Before you choose a paid-for debt management  plan, it’s sensible to contact your lender   directly and explain your circumstances.  Ultimately, they want to get their money back,   so they might be able to freeze a few payments  or work out a plan with you individually.   Tier 3 are your insolvency options. This  is your last port of call for when your   debts have truly got on top of you and none  of the other solutions are available.   These options include individual voluntary  arrangements for larger debts typically over   £10,000-£15,000, where you pay an insolvency  practitioner who then distributes the funds   between your creditors. Administration  orders for debts less than £5,000,   where your local court will act  as the insolvency practitioner.   Debt relief orders, which are an alternative  to bankruptcy. And bankruptcy itself,   which is a court order that declares you  legally unable to repay your debts.   Due to a difference in legislation, these  insolvency options are only available in England,   Wales and Northern Ireland.

In Scotland,  instead of an IVA you have a Trust Deed,   a minimal assets process is similar to a  debt relief order and a sequestration is   the Scottish version of bankruptcy. In some cases, any interest or charges   on your debt will be frozen during your  arrangement or your debts will be cleared.   These insolvency solutions are absolutely a  last resort, though, as they can have long term   implications for your future borrowing power  and will seriously affect your credit score.   For more information on managing your debts  effectively head to finder.com.

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