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Last Updated on by Noni May
The problem with debt is that it’s often a slippery slope. Easy to get into and so hard to get out of- even some of the most organised people who lent money with the best of intentions have found themselves in this position. Once lenders can see you’re making regular payments, they’re keen to lend more and more money, and in time you can end up with repayments that are large and unmanageable. Just paying the minimum payment each month is just covering the interest, so the actual balance doesn’t go down. However, it is possible to get out of debt, reduce your stress levels and put yourself on the path to a brighter financial future. Here’s how you can go about it!
You might feel like your savings are for a rainy day and should be kept at all costs, however it makes no sense to do this. It will work out much less expensive for you (due to interest that debts accrue) to use any money you have saved to pay down any balances. Even if you don’t manage to cover everything, it will bring down the interest and allow you to pay off the balance more quickly.
If you’ve not completely succumbed to debt and your credit score is still ok, one option would be to consolidate. Take out a loan or a credit card, a site like https://www.gobear.com/ph/credit-card will help you to find the best rates. Then use this to pay off all of your other accounts so they can be closed. That way you’re only paying one lot of interest rather than many, which will be cheaper. Some cards will also have an interest free period giving you more time to pay down the balance before any interest is added.
If you’re not able to consolidate due to a poor credit score, another option would be to speak to a debt management company. These can speak to your creditors on your behalf, negotiate lower payments and have interest frozen. You will pay a fee each month for this, but the overall cost of your debts will be greatly reduced since they will put together a payment plan which works for you. Finally getting your debts under control like this can feel like a huge weight is being lifted off your shoulders. You should stop receiving letters and phone calls chasing you for money, and can simply make this one payment each month until all of your debts are paid off. If you find yourself in a better position later on, you could increase payments to get them paid off quicker, or even ask for a settlement figure to pay them off completely.
There’s a lot of stigma surrounding debt, and it can cause people to hide it and bury their head in the sand. However it can happen to even savvy individuals, your best bet is to face the problem and come up with a realistic plan to get it paid off.
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