Getting out of debt isn’t easy, but it is necessary. You can never live your life freely if you have a shadow looming over you about your finances. But it is understandable because sometimes a loan seems like the only option for meeting your needs. Managing household finances like food bills, gas bills, education bills, and so much more just take a toll on your financial situation, and it is understandable.
But even if it is understandable, it doesn’t mean that we should do nothing to get out of debt. So here are some ways you can try to get out of crippling debt.
Table of Contents
1. Get a debt consolidation loan
It may sound too complicated for some, but it is quite easy. A debt consolidation loan is a way to refinance debt to a lower interest rate. This plan can help you save hundreds of dollars in interest and also helps in paying off your debt way faster than the normal route. so apply for a debt consolidation loan.
A debt consolidation loan is like a personal loan, but it comes with a lower interest rate than the other existing debt rates. In simpler words, debt consolidation can help you end the nuisance of repaying multiple debts. You can just pay all your remaining debt in one personal loan for debt consolidation and free.
2. Pay more
As the word says, pay more than your minimum payment required. When you get your salary at the start of the month, go through your budget and analyze how much you can put towards repaying your debt, and try to exceed that minimum amount.
This will help you save money on interest and get out of debt quickly.
3. Put windfalls to good use
If you ever get any windfalls – like a tax refund, stimulus check, or even some inheritances – do not use that extra money to go to a resort or a vacation. Put that windfall into paying off your debt quickly.
It is your choice if you want to fully commit the windfall or split it 50-50 between your debt and something fun like a vacation to a resort or an expensive dinner. But do keep in mind that every little bit of help is another step closer to getting rid of your debt quickly.
4. Negotiating a settlement
If there is a way, try to call your creditors and negotiate for a settlement of your debts. Usually, you can try to negotiate for settling your debts for a lot less than you owe, but sometimes it can pose some risks.
While you can renegotiate on your own, taking help from third-party companies to settle debts for a small fee is also a suitable option. But sometimes, during negotiations, some companies ask you to stop making payments which can turn risky for you and negatively impact your credit score in the long run.
5. Increase income
After you have gone through budgeting and trying to see if you can start paying more than the minimum budget, if it is still not working out, try to increase your income. Do some side hustles, or switch up your jobs if possible to earn more and settle your debt quicker.
Also, if possible, try to change your tax withholding at work. If you are eligible for a tax refund every year, you may have too much money withheld, which is money that you can be paying to settle your debts right now.
6. Keep tracking your progress
Debt is not something that you can get rid of overnight. It is a strenuous task, and most people lose the motivation to repay the loan along the way. But you mustn’t lose your motivation and keep going.
Record your progress regularly and if you feel that you are falling short, try to gauge where you went wrong and correct that immediately. Use a spreadsheet or a virtual chart to remind yourself constantly about your growth and all that you have accomplished and what more you want to achieve further.
If you feel there is some shortfall in your loan repayment, re-examine your budget. See where you can contribute more.
Ending Note
So, in the end, all that there is to know is that repayment of debt is not impossible. Many people have come out of crippling debt and are living debt-free. But it only comes by being dedicated to your cause and keeping yourself motivated. Follow these simple ways (and more) to try and become debt-free as soon as possible and live the best life you deserve!
Also read: Small Business Debt Reduction Strategies: A Mini Guide
