Too much debt? How to get out of debt?

How to get out of debt?

Do you have a debt problem? There is nothing more suffocating than having debts. We feel caught in the throat and we don’t always know how to get out of debt. One thing is certain, to get out of it and repay all your debts, you will have to make a lot of effort!

Not sure how to get out of debt? 10 Tips presents its tips and tricks that could help you get out of debt.

Tips and advice for getting out of debt:

1. Prioritize creditors to get out of debt

When you don’t know how to get out of debt, you must first prioritize creditors. Here are 3 simple steps to know which debt to pay off first:

  • Start by making a list of all the companies you owe money to and sort them by interest rate.
  • Start by repaying as much as possible of the ones with the highest interest rates and only paying the minimum installments for the others.
  • When the first company will be fully reimbursed, move on to the other and so on.

2. Pay bills on time to avoid debt

It is important to always pay bills on time to avoid interest or late charges. For credit cards, it is better to pay at least the minimum requested than to pay nothing at all.

Always paying your bills and accounts on time is the best way to avoid accumulating debts.

3. Make a personal budget to avoid having debts

Many of us live beyond our means. A personal budget will help you visualize your finances.

You’ll see how much you earn, how much you have to spend, and what expenses you need to eliminate. This way, you can organize your payments accordingly.

With a personal budget, it is much easier to manage your finances and avoid debt. Come and find out how to do it here: Make a personal personal budget.

4. Negotiate a payment agreement to settle your debts

If the minimum payments to be paid are too high for you, call an agent of the company in question and explain your situation.

Better to take the lead than to wait until you are hugely in debt and get calls from all the creditors you owe a lot of money to.

Try to establish with him an amount that would be more realistic according to your financial situation. Most lenders prefer a one-payment agreement to receiving nothing at all!

5. Reduce interest rates on your credit cards

If you are unable to repay your loans or credit cards, contact an agent of the company and try to reduce the interest rates you have.

Since the credit companies are in competition, they may agree to lower their interest rates a little. In addition, many credit card companies have low interest rate products.

Your credit card may simply not be suitable for you. So ask them if they have a card that suits you better with better interest rates for you.

6. Make a balance transfer to reduce your debts

These days, banks often agree to have your credit card debt transferred to a card of their own, offering you an exceptionally low interest rate.

It’s as if they paid off your cards and then you only had to make one payment with a very low interest rate, for a period ranging from a few weeks to almost a year.

This trick is very interesting to get out of debt faster with a single creditor instead of owing money on several credit cards.

7. Pay the maximum of your debts to get out of debt

As soon as you have a month where you are less financially tight, pay double your minimum payment required to pay off your debt and interest as quickly as possible.

In this way, you will also avoid having to redo your hard-hit credit due to non-payment.

8. Set goals to get out of debt

You have too much debt and don’t know how to get out of it? Set a goal! Getting out of debt will be easier if you set goals.

Figure out what you want to pay first, or what you want to save in savings, and make a plan to get there. This is the only way to successfully get out of debt, make an action plan!!!

You don’t know how to save money to get out of debt?

A simple way to save money is to ditch those small daily expenses that aren’t needed. Let’s take the example of the coffee latte that you pay a high price for on the way to work. Get a mug you can take with you in the car and make your own coffee in the morning.

That’s easily $25 saved each week, which you can use to pay off your debts!

9. Apply for debt consolidation

Did you know that you can request debt consolidation from your bank? This is a full repayment of your debts that will be made by your banking institution and that you will then have to repay by making a single payment every month.

Be careful, several agencies offer this type of solution to repay debts, but with staggering interest rates. Take the time to shop and ask questions! You don’t want to find yourself in even more debt than before and for any longer.

If you are also looking for tips to rebuild your credit, read our practical advice right here: How to rebuild your credit?

10. Stop paying by credit to avoid debt

Before buying something, ask yourself if you really need it and if you can pay cash. If the answer is “no”, wait until you can afford it.

Stopping paying by credit is the best way to avoid debt!

Now how about finding a way to earn more than before? Come read this other article: How to do more with less?

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