Are you drowned in debt? If so, repay your creditors fast to become debt-free. When you default on payments, the rate of interest keeps increasing each month together with a late payment fee.
It has a negative effect on your credit rating. People take out loans from the bank and online lenders because they do have the funds required to buy a home, a car, or finance their higher education.
You may be advised to pay your mortgage in cash but if you do not have the money, how would you make the payment? It is a matter of debate among people inundated with a high-interest mortgage.
Therefore, debt consolidation is the only solution for bigger loans like mortgage, multiple credit card debts or student loans. It is not the time to think about how you got into a financial mess but to opt for a practical solution to your financial woes.
The best way out is bycombining your multiple debts into a single account or payment system, called debt consolidation. It is the best alternative if you have a shortage of liquid cash.
Consolidation will help you repay all your debts quickly and that too with reduced monthly interest provided you have a good credit score.
According to an article published on huffpost, most personal loans work best for debt consolidation, as they are multipurpose.
Besides, you must avoidunwanted expenses to free up cash fast. It will let you repay your debt without fail. Avoid eating out, buying movie tickets, and needless shopping until you dig out of your debt.
Make an effort to stop spending on such items until you are debt-free. Here are the three tips and tricks to help you dig out of your debt quickly:
1. Say ‘No’ To Minimum Payments
Making minimum payments every month is the greatest blunder of borrowers. They believe shelling out the minimum amount will make things easy for them in the days to come. Wrong!
The habit would prove detrimental to your finances because it will help you pay off your monthly dues but not help in repaying the principal.
Try to repay more than the minimum amount to repay the actual amount you have borrowed. It will help you to become stress-free financially in the days to come, making you pay your dues on time to become financially stable.
It does not make sense to keep paying your student loan for 22 years without making an effort to reduce the principal sum that you took out from the lender.
2. Do Not Use Your Existing Credit Cards
Though it is no brainer, many borrowers make this mistake. Make sure you do not use your existing credit cards for shopping.
Your goal is to opt for a consolidated loan and pay off all your small and big loans under a single payment system.
Until you are debt-free, avoid using your credit cards. Else, you will land up in the same financial soup, enmeshed in the web of never-ending debts, and fail to achieve your financial goals.
Make sure you pay off all card dues as soon as possible to improve your credit score and spending habits. Do not pay heed to rumors.
There is no need to listen to people who say that you need to maintain some balance to reach the credit rating. Did you know that the amount you have borrowed as a loan and other credit card debts previously make 30 percent of your score?
If you have any doubts, read and research online material before taking any decision. For more also visit NationaldebtRelief.com
3. Consider Selling The Old Assets You No Longer Need
We know that it sounds disappointing but think on logical terms. When you have numerous debts affecting you and your family, what is the use of keeping those assets that you no longer use? Think about it.
It makes sense, therefore, to sell these old assets and use the money to pay off your dues. For example, if you have two cars in your garage and one is enough for your traveling needs, sell the old model to fetch you some fast cash.
When you have a tough time repaying your creditors, selling your old assets such as cars and furniture, is your best bet.
Did you know that the idea of compound interest is beneficial for you to make your life easy when you are drowned in debt? Therefore, just sell your old assets to repay your loan quickly and without fail.
You do not need to use these assets considering your current financial challenges. You can invest in a new car later, at least a year after you are debt-free completely.
It does not make any sense to use assets that are not adding any value to your lifestyle when you are in debt and having problems to make your monthly payments.
When you have inherited a huge house and most of the rooms and parts of the property are not in use, rent those portions out.
It will fetch you good money that you can use to make your loan payments on time and become debt-free fast. You can also consider selling your property and live in a small house that fits your living needs.
There are emotional attachments when you have a big house but if you do not have the means to repay your creditors, renting out or selling your property makes sense.
These are little lifestyle changes to help dig out of debt fast and lead a stress-free life. There is no financial burden on you and collection agencies will not bother you with calls, emails or personal visits when you are debt-free. Think about it and make a sensible decision.
These important changes in the way you live will make you dig out of your debts faster than you have imagined. It is all about common sense and acting wisely when in debt.
Now that you have these tips and tricks handy, implement these ideas in your real life. Life will become enjoyable when you become debt-free. Try it and these ideas will work to your happiness.