Emily Moore talks to Josh Le Corre of Smart Money about the potential benefits of a debt consolidation loan
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January is often renowned for being a difficult month financially, with many people having splashed out beyond their means to provide an expansive spread and a wide array of presents for family and friends over Christmas.
And this year, those financial woes are even more pronounced for many people, with the cost-of-living crisis and higher rental/mortgage repayments taking a toll on several bank balances.
But while glancing at bank statement may be enough to send shivers of fear through some householders, the picture may not be as bleak as it seems.
Indeed, as Smart Money business development manager Josh Le Corre explains, the situation can often be better than people think.
“A lot of people think that they are in a financial mess but, in many cases, there are simple solutions which can significantly transform a person’s situation and help them to regain control of their debt,” he said. “The simplest solution, and one for which we are seeing high levels of demand at the moment, is a debt consolidation loan.”
Here, Josh introduces Smart Money and highlights the ways in which a loan can help people to transform and reshape their finances.
What is a debt consolidation loan?
This is a simple structure which can help people to reduce their monthly outgoings. This can be particularly effective for people with a large overdraft, store and credit cards or other personal loans, as it combines them into one new, often lower, monthly payment. Typically, the rate of interest on store and credit cards is a lot higher than a consolidation loan. It is important to point out, however, that a debt consolidation loan won’t reduce the amount that you owe, but it can help you repay what you owe in a simpler, more manageable way.
What are the advantages of a debt consolidation loan?
As well as the lower interest rate generally charged, it is much easier to manage one monthly repayment than multiple payments. While many people may just be making minimum repayments towards their credit cards, a debt consolidation loan supports them to pay off the full balance, with the aim of ending the cycle of debt. Very often, you pay less per month repaying this loan than you would trying to clear each debt individually.
Is it not counter-intuitive to take out a loan if you are already in debt?
That is a common perception but with the underwriters paying off your existing debts, you then only concentrate on repaying one amount, at a level which is realistic for you and hopefully lower than your current payments. Alongside this, you will be clearing balances in full rather than just making minimum repayments (store and credit cards) which are typically eaten up by interest. We always recommend that people speak to us about taking out such a loan before their debt becomes overwhelming.
Why come to Smart Money for help?
As well as having extensive knowledge and experience of the lending market, our team is committed to helping individuals to address their financial concerns and boost their overall wellbeing. We know that money concerns can be hugely worrying and can have a significant impact on people’s mental health.
During a career spanning insurance and lending, I have gained considerable experience working with people at times which are particularly difficult or distressing for them. We also recognise that acknowledging that you are struggling and that you need help can be very daunting for people, but it is always better to act sooner rather than later.
Traditionally, money has been something of a taboo subject between family and friends, and we are keen to break that taboo and support people to find a way out of a potentially difficult situation before it becomes an issue.
What makes Smart Money different from other loan companies?
As a subsidiary of the Prospect Capital Group, Smart Money focuses on all types of local consumer lending. The business was established by experienced lending professionals, with combined experience of over 125 years, who saw the opportunity to do things differently from other providers.
In founding Smart Money, we replicated the best of the services we had seen elsewhere while taking the opportunity to provide a more dynamic service, tailored to each client’s needs. Everyone’s financial situation and lifestyle is different and therefore you cannot offer a one-size-fits-all approach.
Our Feefo reviews show that this approach is not just something we think we are doing. Clients confirm it. Over the past six years, we have gained more than 3,500 clients and our strapline is: “Find out why thousands of Islanders use Smart Money.”
Some of these reasons can be found in our Feefo reviews, where clients comment on the speed at which applications are approved, the competitive nature of our rates and the way that we make people feel at ease with the application process.
Can you explain the application process?
Most people contact us through our website in the first instance. We will then arrange an appointment or call to discuss their inquiry in greater detail. One of the reasons that applications are typically approved within 24 hours is our understanding of the criteria that underwriters are looking for.
While they do not have any concerns about people who have used their approved overdraft limit, red flags will be raised if people have exceeded that limit on numerous occasions. They also look more favorably on applications where people’s credit cards are not maxed out and, for larger amounts where the debt is shared, they prefer joint applications. Therefore, if you live with a partner/spouse, it is often beneficial to make the application in both your names.
One of the biggest red flags – and something which we are seeing increasingly – is excessive gambling. This increase is not only being driven by traditional forms of gambling, such as betting on the outcome of football matches or horse races, but by lottery or bingo apps. While the occasional bet or game is not deemed an issue, this is something to keep an eye on.
This insight into the market gives us a dynamic edge, as we understand the underwriting process and can present the application in a way which will give it the greatest chance of success.
What measures do you put in place to support your clients?
Responsible lending is at the core of the business and loans are judged against a strict set of criteria. We understand that people may be struggling when they come to us and would not seek to put them in a worse position.
We suggest that clients review their finances before applying for a loan. It is much better to apply for one loan to consolidate all debts than to apply for help to clear one credit card and then return six months later, asking for another loan to clear another card.
What services do you offer to help clients achieve this?
We offer a free financial health check, which is a great way for anyone who is unsure about their situation to pop in and talk through their finances. With their permission, we will help them to set up an account with a credit reference agency so that they can keep an eye on their finances themselves. This can also be a useful way for people to identify ways of reducing their outgoings.
What other loans do you offer?
While the demand for debt consolidation loans is high at the moment, we also offer a full range of personal loans, business loans, property lending and asset finance including vehicles. Repayment terms vary from 12 months to 84 months and as mentioned earlier, most loans are approved, and the money in the client’s account, within 24 hours of the application being submitted.
How can people find out more?
Anyone interested in learning more about any of our services, or applying for a loan, can do so online at smartmoney.je. Alternatively, they can contact me by calling 288961 or emailing Joshua.lecorre@smartmoney.je.
