Jun 20, 2019

How to Get Out of Debt

Short term and payday loans are very convenient ways of borrowing money. However, if you are unable to make repayments on time, debts can quickly pile up. Whether you are borrowing on a credit card, or a loan, keeping up to date with your payments is essential if you want to maintain a good credit score. Bad credit can affect your ability to get accommodation, certain jobs and a mortgage. If you feel as if you are in over your head with short term and payday loans, here is some debt advice to assist you.

Take Inventory of Your Debts

Before you do anything, you need to know exactly how much debt you are in. Write down the name of each creditor as well as how much money you owe to each of them. Good debt advice also includes taking note of the interest payments owed on each debt. This is important, because what you want to do is pay off the debts with the highest interest first.

Call The Companies

The next step in the debt advice process is to call the companies that you owe money to and arrange a payment plan. If you are lucky, some companies will allow you to make a one-off lump sum payment and clear the debt at a significantly lower amount than you owe. If you have the money to do this, go ahead, it will be cheaper in the long run.

Stop Spending

The next step in the debt advice process is to stop spending on your credit cards and to stop taking out loans. If you are not able to discipline yourself, cut up your credit cards. As for the loans, there is less chance you will be approved for any more credit if you have already defaulted on payments. You will never get out of debt if you can’t stop spending.

Final Thought

It is important to mention that debt advice can only benefit you if you heed to it. Some people think that the only approach to getting out of debt is to get into more debt to pay off the debt you already owe! This is counter productive and only leads to a vicious cycle that could end up taking years to get out of. The easiest way to stay out of debt is to live within your means, in other words, if you can’t afford to buy what you want outright, don’t buy it.

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Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk

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