Get out of That Debt
We know debt sucks, let us help you.
Anyone you ask will tell you having debt is bad, if you lose your job you lose your ability to pay your debt back!
Debt may sound scary to you because it actually is. Firstly it reduces your purchasing power, Secondly its a burden on your shoulder(AKA Liability) and thirdly if you default on it… Don’t even think of defaulting on it because the consequences are endless
So to get out of that scary brain eating situation here’s are our Tips on how you can improve your situation or rather Just break free from your debt.
1. Make a list of your Debt.
You can’t pay it back if you don’t know what you owe.
so the first ever step to breaking free is to evaluate your debt,
this includes bank loans, Credit Cards (those tiny dangerous cards), Creditors and Loan sharks
Make sure you take out your bank statements, Loan statements look at your past payments and your upcoming Installments.
2. Analyse Your Debt.
Once you got those 90’s tabled document called bank statement, start analysing it, look what you owe plus how much interest rate it is at and even how much longer till you no longer have to pay them.
given how useful Credit Cards(CC) are, they’re also the worst in terms of interest hunger, While the average Interest Rate is 24% some can take away as much as 35% APR. If possible pay a Professional to analyze for you because in the end its worth it. Seeking financial advice is also very crucial like it or not.
3. Plan your moves.
Think of it like chess, you want to have money with you in your hand to pay off the remaining debts so plan your moves, for instance, start with Credit cards since they have high-interest rates then make your way into the lower interest car or home loans.
4. Time vs Money.
keep in mind time & debt go hand in hand, try your best to pay off your debt starting with high-interest CC or loans so that you’ll have more cash to pay off towards the smaller ones when the big ones are gone. Longer you have the high-interest loans, more you have to pay interest on them.
5. Reduce your Creditors.
Probably contradicting myself you may think? If you’re having a lot of creditors, the people and institutions you borrowed from, well try to reduce them. Start with the smaller amounts and just finish them off. Once smaller loans are paid you’ll have much more money to put towards your bigger loans. Try to use automated Payment gateways if you’re creditor allows for it, it will just make your life a lot easier since idle waiting time can be avoided.
6. Avoid using Debt to Pay Debt.
You’re reading this so you’d like to pay off your current debt, avoid taking newer loans to pay off your current loan, they’re just not worth it Well not unless credit is cheaper than it was when you borrowed.
if that’s not the case then try your best to avoid new loans.
From time to time and during depressing banks offer low-interest loans and even sometimes offer 0% interest loans(if you pay them on time well they make money from other fees they levy so its 0% interest.) make the most of these offers, always hunt for deals but just not on Amazon.
7. Don’t be Spendy.
Control your spendings, For real, you’d want to make a strict budget and stick to it.
Cook at home avoid eating out, spending on impulse goods.
If possible make an excel sheet and track your Spendings this way you’ll understand where you can cut down. either utilities or Shopping.
8. Pay it off and Avoid Another Debt.
Absolutely AVOID Debt, Whether its the easy installments ones or ‘pay off flexible’ one. Just avoid Debt, as simple as that.
You’d not want to get more debt, saw a shiny new phone? it won’t help you earn more than you’re currently earning? Then you know whether to buy it or not.
Always make informed decisions. Since this step is your exit of debt look into investments and Grow your portfolio and Good Luck.
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