Dealing with debt means operating on both the defensive and the offensive: When your goal is to cut down on debt, the keys are to stop borrowing more money, to make sure you can afford your payments and to try lowering your interest rates as much as you can.
Here are six tips to keep your debt under control and speed up the process of reducing your debt.
1. Stay on top of your credit
Everyone who borrows money should keep an eye on his or her credit score. If you have loans and several accounts to deal with, you’ll need to know how your debt affects your credit rating. With better credit, you can be eligible for less expensive loans or potentially have some leeway to reduce your interest rates. If you want to pay off your loans as quickly as possible, having a healthy credit history may help you negotiate your way to lower rates.
2. Consider consolidating your loans
You may want to consider consolidating your loans as a way of reducing your debt. For example, balance transfer credit cards can offer some relief if you can commit to paying down your debt before the interest rates bump up. You can also consolidate debt with instalment loans from a bank or online lender.
3. Do your own debt management
Before you pay for credit counseling or turn to debt settlement companies, do all you can to handle your debt issues on your own. Handling things on your own is cheaper. A lot of it is simply fiscal discipline: Start off by avoiding new debt. Cut back on spending and try to earn more to cover your bills. There’s nothing others can help you with that you can’t already do on your own.
4. Lower your interest rates
Find out if there is any way to reduce your loan rates. Can you qualify for low-interest credit cards? What about taking out a cheaper personal loan to pay off a more expensive one? Some financial institutions even have hardship programs available, and some banks are willing to negotiate with borrowers who approach them for guidance. It doesn’t hurt to try!
5. Pay your bills on time!
You know you’re in trouble if you’re unable to make your loan payments on time: Let this be an indication that you should make it a priority to address your debt. Do your best to cut down on expenses while paying on time. Paying your bills late will only cause your rates to go up and worsen the situation.
6. Pay more than minimum each month
If you ever find yourself with extra income, you should think about applying it towards your debt. If the debt is causing you to struggle, you want to get rid of it A.S.A.P.
The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.