Foolproof Tips to Get Permanently Out of Your Harassing Debt
Nowadays, it is not surprising to be trapped into a debt such that it keeps distressing you often as well as burdening your bank balance. Sometimes, the debt keeps on increasing just because the employment of ineffective ways to pay it off. For example, you may end up taking loans to pay an already existing debt but might be unable to pay off that loan due to low income. Well, such mistakes have happened in the past due to which many debtors now take foolproof steps to pay off their debts. Although many feel difficult to come out of this fiscal burden, it is actually not that difficult if knowledgeable and proactive strategies are put into practice. Here are some strategic tips for the same.
Always Maintain an Emergency Reserve
This can sound a bit insensitive while you are trying to pay off your debt, as you need to use that money to repay your debt rather than saving it as a fund. Nevertheless, such a reserve actually prevents you from entering into more debt as it works as a safer solution over your credit card at the time of emergency. Usually, you need to start creating it even before you face a financial crisis. Ideally, you should deposit the amount in installments that becomes equal to the living expenses for one year.
Choose One Debt and Pay More towards It
If you have so many debts to pay off, choose one of them and give all money there to get rid of it as soon as possible, instead of reducing the burden of all debts by paying minimum at fixed intervals. In this way, your progress towards getting rid of overall debt will be rapid as well as satisfying, as you pay a big sum to just one of your creditors. Meanwhile, you can pay minimum to other creditors. Take this approach for those creditors to whom you owe more.
Find Out Affordable Ways to Make More Payment
As a rule of thumb, the more money you can gather for repay, the faster you can get rid of your debt. Therefore, in case your current earning source is inadequate, you can build a monthly budget to better channelize your money by reducing the monthly expenses. You can even sell some things, start your own part-time business, take some instant cash advance for short term at lower interest rates, or borrow from your friends.
Stop Increasing Debt
Although this idea does not reduce your debt, it is wise enough not to increase your fiscal burden such that it debilitates you to repay it. Here, you need to avoid ideas like using your credit card or taking up high interest loans for paying the already existing debt. This is because these are risky sources that can keep you trap under the burden by increasing your debt amount. Therefore, it is better to control your lure towards such tempting ways of dealing with debts.
Negotiate for a Lower Interest Rate
Any loan or debt with high interest rates simply puts you under debt for a longer time than expected, as you pay much more towards the monthly charge instead of the remaining balance. Therefore, make efforts to convince your creditors to reduce your interest rate. If you have a good credit history, this is really an effective way to get rid of your debt quickly. In case you settle by a balance transfer for obtaining a lower rate, it is advisable to repay the balance prior to the expiry date of the promotional rate for avoiding the risk of higher interest rate.
Bio: Peter Smith is a freelance writer based in Singapore. He likes to write on topics related to finance and health. Right now, Peter is writing on debts and loans. He has recently shop around Singapore to get cheapest loan.
Category: Debt
