The plan is always to save a little at the end of the month, pay down those debts and move on with your life but something always seems to come up and those debts are beginning to get you down.
The problem with credit card and loan debt is the interest. It quickly mounts up and you find yourself making no impact on the capital you owe, just paying off the interest each month.
If you’re struggling with debt and are looking at getting back on an even keel, then this blog is for you. In it we’re going to look at some strategies to help free you from the burden of debt and move on with your life.
Make an Honest Assessment
It can be daunting to see the figures stacked up there in black and white, but when you sit down and look at your outstanding debt for what it is, that’s when you can start to make some real plans.
If the majority of your debt is on credit cards then you’re going to need to stop spending right away and cut the card up. The same for any other cards that you have. You then have a couple of choices that you can make to help with the debt.
If your card charges you a higher rate of interest, you might consider transferring that debt to an interest-free card. You may have to make several swaps through the duration of your debt’s life until it’s paid off.
Or you may consider a debt management plan, which is often a great solution if you have multiple debts from various lenders. In essence this means approaching those creditors and having them agree to lower your repayment rates while also agreeing not to add on any more interest. They will do this if you have been struggling to meet your repayments and are in danger of defaulting on the loan.
If you’re unsure of how to do this, then there are third parties and debt charities who can help you accomplish this.
Consolidation as a Last Resort
It’s often more straightforward to manage each debt separately, especially when you can get the majority to cancel their interest but some people find a debt consolidation loan helps them to stay in control with one payment made each month. You should opt for the loan with the lowest interest rate and try and pay above the minimum payment each month to make a dent in the capital.
The disadvantage here is that the debt will be paid at a much slower rate over a longer period of time and you will end up paying back a lot more than your original debt.
Talk to an expert today about your debt worries and get some help before the problem becomes an issue and you find yourself getting worried about how you’ll repay back your debts. Take action and put yourself back in the driving seat of your finances.
*This is a collaborative post.