People take different debts like credit card debt ,student loans, mortgage and many of such kind and are sometimes caught in debt and are not able to repay them .If you are one of them and have a load to pay back but is not able to figure out a way how to , here are few tips which you can follow .Following this steps may not make the amount you took less but will surely help you to figure out ways how you will be able to .
- Make a list of all your debts – Making a list of all your debts with the interest rate and balance will give you a comprehensive understanding of how many bills you need to pay back and how much the total bill amounts to .And the interests will help you know how much each one is costing you extra every month.
- Renegotiate the interest Rates – If the size and number of your debts are massive, try to renegotiate the interest rates if possible. This will help you to spend less money on the charges . Call the credit card company to check if there are ways to get a lower interest rate.
- Don’t take any other loans – Commit yourself to not taking any new debts. You may have to cut most of the expenses from your lifestyle but this would help you to tackle the previous loans without giving you additional pressure on your shoulders.
- Plan a new budget with the debt repayment amount in mind – Create a budget keeping your spending under control and find extra savings that you can apply to the debt.
- Choose a strategy to payoff – There are two common options /strategies to pay off a loan
- a) Debt Stacking – Ranking your debts based on interest rates from highest to lowest and repaying them one after the other. Make minimum payments of every debt and apply extra towards the debts with higher rates.
Take this as your target debt and focus onto paying off and getting rid of it first.
- b) Debt Snowball – Ranking the list of debts based on the outstanding balance from smallest to largest and paying them off eventually is what this category says.
This strategy is designed to keep you motivated.
Once a single loan is cleared by you, you will feel more confident and motivated to pay off the next ,step by step.
Choose any thing you like just push yourself forward to making progress .You will find yourself in a more financially stable condition once you start taking the steps into work.
