There are several reasons that can lead to debt: unforeseen expenses, medical emergencies, loss of employment, etc. When it gets out of hand, it can easily affect your psychological and physical health. The first thing to know is that this situation can affect everyone. And even if the situation may seem overwhelming, you should also know that it is not final and that solutions exist. You can break this deadlock. We tend to say, that to pay off debts and save money, you have to do it step by step.
In this article, we will discuss some ways that you can pay off your debts and get out of a debt situation to reduce loan burden.
The solutions to pay off debts easily
“Money” is any money that you have to pay back or pay. It can be an unpaid electricity bill, a telephone bill, an insurance bill, but also loans you have taken out, such as a car loan, home loan or any other type of consumer credit. There are ways to pay off debts and save money, but let’s be clear, paying them off is never “easy”. Do not veil yourselves face up. However, the following are the most common ways that can help you get out of debt. Calculate your credit score to be sure of what you have on your plate.
Make a credit buyout
As the name suggests, buying back credit allows you to redeem one or more of your current credits. To do this, you take out a new loan from another institution so that it covers the amount of your debts. This process allows not only to postpone the schedule but also to lower his monthly payments.
The whole trick is right there! By extending the deadline, the loan is then repayable over a longer term, which lowers the monthly payments mathematically. If this is your goal, we recommend that you contact the following organizations:
Before establishing your new loan, remember to take into consideration the various fees that may accompany the repurchase of credit but also the prepayment fees. The IRA (Early Redemption Indemnities) are for the most part capped at 3% of the remaining amount of your credit and must not be greater than the sum of 6 months of interest.
Finally, the choice of your establishment must be made on the one that offers the least fees. Some organizations may charge you fees related to the evaluation of your file. So take it all into account.
Go for a credit consolidation
Credit consolidation means that you combine several of your credits into a new loan.
It can be several loans of the same kind as the different kinds of consumer credit or loans of different types like a mortgage and a consumer credit (even if this case remains rare). As with the repurchase of credit, it is most often contracted with another credit institution. Here are the things we recommend:
The new credit institution must offer you a more favorable term structure such as a lower interest rate, lighter schedules, etc. So, you need to consider all of these points before you commit to a credit union.
Here, of course, the amount you will receive from the new loan should be used to pay off debts and save money. While most organizations will go straight to clearing your debts without crediting your account, there are a few that will first transfer the money to your bank account. When this is the case, don’t waste time and settle your receivables!
Pay off debts step by step
Money is an element you need every day and depending on your situation, it is sometimes difficult to manage its use. To meet your obligations and meet your personal or family needs, you may have to take out credits and loans.
Unfortunately, these can become a burden and prevent you from finding a balance in your daily life. Whether with a banking institution, a specialized organization or a business, you must agree to make the reimbursement. Before thinking about saving more money, it is first important to pay off your debts.
Whether for studies, for a professional or real estate project, you have already asked for a credit. Of course, lenders often consider your possibility of repayment before granting you the amount you want. But unforeseen events can arise and make reimbursement more difficult!
To get to see the end of the tunnel, it is advisable to organize yourself well. We are talking here about your time, but also about your charges and expenses. This way, you will be able to know what the priorities are and have a better idea of the amount to save in order to repay your debts.
In case you are a student, you can allocate part of your scholarship to pay off your debts. You may also have to sacrifice some of your time and social life in order to work outside of your studies.
Increasing monthly payments is also a way to get the debt out of debt as quickly as possible. On the one hand, it will lower the interest, but it can also reduce the repayment deadline. However, you will have to reduce your monthly expenses in different ways and review your habits.
If these tips are not effective in your situation and you are still drowning in debt, you must take the next step. As a result, you tell them about the problems you are facing and the reasons why you are unable to repay your heads. On some forums, you can find 1 or 2 examples of standard letters of over-indebtedness. These examples can be personalized according to your situation and sent to the commission responsible for over-indebtedness.
Other files related to your professional and financial situation may also be requested to complete your file.
When your file is in their possession, they can help you find the best solutions to your situation. It can be postponing the end of the date of payment of the debt, a partial or total erasure of this or even liquidation of some of your property with your agreement.
Tips for saving
In order to avoid falling into the debt trap, it is best to save your money. This will allow you to always have enough liquidity for your needs or for your projects. For this, here are the tips to adopt to store as much money as possible and successfully avoid taking credits.
When you were a child, you may have already used a piggy bank to buy yourself a gift or to participate in an outing. This method is still effective because it allows you to put aside small coins lying around in pockets or change money that you don’t need right now. In the long run, you will be able to get a fairly large sum.
Take advantage of the sales
Are you planning to replace your furniture or change your dressing room? Instead of spending maddening sums in the normal period, prefer to wait for the sales periods. Make a list of your needs, find the stores and stores that offer the item you want and make a budget. When you go shopping, be sure to respect this amount and not to make any difference so as not to weaken your financial situation.
Review your daily expenses
The morning coffee at the bottom of the work building, the lunch at the restaurant, the after works which often return can surely be eliminated or at least reduced. For example, get up early so you have time to prepare your coffee and lunch.
Pay attention to your breakdown service providers
The sink is blocked, your key is broken in the lock, your heating is broken? Whatever the emergency, take the time to analyze different offers before calling a convenience store. Ask for a quote, compare prices, check that breakdown service is covered by insurance before calling the service provider. In this way, you will avoid scams and exorbitant bills when paying.
Save at the bank
When you have trouble not using the money that is at home, it is best to call your bank advisor. You can open a savings account and prevent it from being debited before a predefined date. In this way, you will not be able to have access to this money which will be kept in a safe place and will gradually increase. Here are some more loan tips for you to consider.
These different savings tips will allow you to avoid going into more debt than you need with various credits or loans. Your financial habits and the prioritization of your expenses can have a significant impact on your stock market.
Do not hesitate to take stock of your situation and think about it before applying for a loan. Remember that this represents a serious commitment and that you have the obligation to pay it!