Though many people have no choice but to take out small personal loans to cover the rising cost of bills, food and water, knowing how to pay them off quickly and get out of debt can be a real problem for some. The trouble with only offering minimum payments is that the interest accumulated will be considerably higher than one might expect, leading to a substantial increase in repayment times. Nobody wants to owe money forever, and it would probably be quite nice to know that all the cash being paid into your bank account at the end of the month belongs to you, right?
Well, luckily for you I’ve been performing some extensive research over the last few months for a friend who’s been in debt continually for the last few years, and I feel confident the techniques I’ve uncovered will help him (and you) to achieve total financial stability on a far decreased timescale. So, take a moment or two to read through the rest of this article, and I’ll do my best to explain it all in layman’s terms.
Avoiding Minimum Payments
Definitely the most efficient way of getting out of debt with credit card companies and even your own bank is to pay more than the minimum every month. Giving them their recommended amount will only prolong your agony as more and more interest will be applied, meaning that payments will need to be made over a much longer period – not something you want ideally.
Using Your Savings
I realise that nobody really wants to use their savings account to satisfy credit card firms, payday loan businesses or logbook loan companies, but the truth is; if this means you’ll be debt free sooner; you really have little choice. Just think; you’re going to have to pay these firms much more money the longer you drag it out, so surely it’s better to give them the money now and work on your savings later.
Remortgage Your House
Presuming you own a property and have been living in it for a few years, it might be possible to free up a bit of cash by remortgaging. All you need to do is speak to your current mortgage provider and ask them how they can help. This will probably mean that your monthly payments rise, but so long as this rise doesn’t equal the amount you’re currently spending on keeping your debts in line, it will be a sensible move.
Renegotiate Terms With Your Lenders
Most lenders have little desire for passing your debt to a collector if you can’t meet your commitments, and so if you’re having trouble making the monthly payments, it’s always wise to give them a call and let them know about your problems. In most cases, they’ll be willing to lower your monthly bills slightly to keep you on side. Passing the debt to a collector means they’ll receive considerably less in payment than they otherwise would – so see if they’re interested in working with you before opting for a default.
There you have it guys! If those tips and tricks don’t help you pay your debts in a more timely manner, you must be doing something wrong.
I wish you the best of luck!