Published On: Tue, Jan 21st, 2020

How to Get Back on Top of Debts

Today, it’s not uncommon for most people to be repaying some kind of debt – whether it’s larger borrowing like mortgages or car finance or smaller lines of credit such as hire purchase agreements, short-term loans, smartphone contracts, and credit cards. For the most part, debt doesn’t have to be a bad thing if you are able to manage it wisely – repaying debts responsibly and only borrowing money that you can afford to pay back can give your credit rating a boost over time and leave you in a better future financial position. However, the bad news is that it’s all too easy for debt to take over your life, even if you borrowed carefully. We’ve listed some of the best strategies to help you get back in control of your borrowed money. 

photo/ Michael Jarmoluk via pixabay

Repay your debts with a consolidation loan:

If you’re struggling to balance making several repayments to multiple debts each month, the option of a consolidation loan could be ideal for you. A debt consolidation loan is when you take out a loan that provides you with enough cash to pay off all your other existing debts in full; afterwards, you will only need to worry about making the monthly repayment to the consolidation loan itself. As a result, this often works out much cheaper than making multiple repayments in addition to being easier to manage. Some borrowers offer consolidation loans, or you can get a personal loan from your bank. If you don’t have a lot of debt and want to use a consolidation loan to get it repaid as quickly as possible then this short term loan direct lender may be able to help

Repay one by one with the debt snowball method:

The debt snowball method is a popular strategy that allows you to tackle each debt one bit at a time. Start with your smallest debt and continue making the minimum repayment to all your other debts, while putting as much extra cash as you can afford towards the smallest to get it paid off quicker. Once you have repaid that debt, the money that you would normally use to repay it can go towards the next one up, and so on until you finally pay off your largest debt. 

Get in touch with your creditors to negotiate a plan:

If you’re really struggling to manage when it comes to your debts or you’ve suffered a drastic change in circumstances that has left you unable to meet your minimum repayments, then don’t put off getting in touch with your creditors or wait until they are sending letters and calling you every day. Sometimes, a conversation with the creditor is all it will take to give you a little bit of breathing space – most creditors will be happy to make reasonable adjustments to help you get back on your feet and they will always need to prioritise making sure that you can pay your priority bills like rent, mortgage, council tax, and gas and electric. 

If you’re struggling with a lot of debt, the good news is that you can use one of these strategies to reduce the amount you owe and get back in control.

Author: Carol Trehearn

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