Paying back debt takes time and effort. No matter how helpful a loan proves to be, it's always inconvenient at some point. Most expenses are unavoidable; hence no one can prevent circumstances that lead to debt. Debts significantly affect the financial lives of individuals, and the impact is never pleasant.
Everyone wants to be debt-free because debt is a prison that makes one suffer financially. Paying back is the only way out. It is not all about repaying the loan, but doing it on time. Delaying will make you spend more than what you borrowed. Most people are determined to complete paying as soon as possible but are clueless about where to start from.
This article is just for you. It highlights the easy methods of paying back debt.
1. Borrow to pay
The best way to clear debts is by paying everything at once. The personal loan will help you achieve this outrightly. This method doesn't hurt your credit card. It boosts your credit scores.
Many lenders, such as Bugis Credit, are offering personal loans, it's up to you to decide on the most suitable. The mistake done by many is closing credit cards once the debt is paid off, don't do that. Let your account remain open even after paying back, doing so will improve your credit card's status. Again, be careful with this option. It might be the worst mistake of your life if you don't choose wisely. Make sure you understand the terms and conditions of the lender before making a deal with them. Failure of this will haunt you in the future.
2. Erase any valuable information of your credit card from online stores
As an online buyer, probably you have saved crucial information on your credit card on the internet. Understandably, you want your check out process to be easier, but it's not safe. Chances are your card will be charged for things you don't even need. Sometimes staying off from debt is the fastest way to pay off your dues. Therefore, ensure you delete all details from your retailer's platform, they can use it to their advantage. Preferably used debit cards for your recurring online shopping.
3. Keep away your credit cards
It's tempting to use credit cards unnecessarily. As a result, you'll have accumulated debt to pay back. To avoid this temptation, keep your card out of reach until you return to your normal financial situation. Consider leaving it at home instead of walking with it in your pocket. However, ensure you can recall where you'll put it. Otherwise, you'll mess yourself. Try this and witness how you'll pay off your outstanding debt without adding more dues.
4. Use the snowball approach
Here you start making small progress until you finally clear everything. It's what to go for if you are looking for a motivating option. In addition to building motivation, it boosts your credit card's ratings. How does it work? First, make a small payment in each balance you have. Afterwards, focus on the account with the least pending bill going to the next until you finally pay everything. Outstanding dues in several credit cards is stressful and expensive. With snowball, you'll pay your debt faster and escape harsh penalties. Although this method has noticeable progress, it may cause you to pay high interest for the latest debt payment you make. This is because as you pay the small amount, the interest of bigger debts continues to mount up.
5. Make use of balance transfer
Having accumulated balance in one credit card is inconvenient. Paying back will be costlier due to extreme interest fees you'll be charged. Using balance transfer will be the perfect solution. Simply transfer your balances to another card with lower interest rates.
However, it's not entirely free. Most creditors demand balance transfer fees. Only a few don't charge. At this point, having a good credit score will increase your chances of getting great deals. It allows you to save on interest, thus pay your debt faster.
6. Play safe with your interest rate
Interest rate is what makes debts to be costly. For faster debt payment, start by paying those with the highest interest fees descending to cheaper ones. Before you know it, your debt will be over. However, don't count on this option for motivation. Unlike other methods, it'll take time before you recognize the progress made. It needs patience and persistence since the results won't be noticed immediately. Eventually, all your dues will fall away, and you'll gain the freedom you were looking for.
7. Declare yourself bankrupt
Before you consider this option, make sure you are entirely out of other alternatives. This might be the worst choice to think of. It's expensive because of court filings and also involves a long process to push through. It'll take time before your bankruptcy is declared. While choosing this option, you may decide to surrender your properties or keep them. The lenders will be informed of your bankruptcy hence extend your payment period. Some may opt for your wealth as collaterals. Ensure you seek counselling from credit dealers before picking this method.
8. Make extra money
One source of income is never enough for all expenses, leave alone paying debts. Look for a side hustle to earn more money. Think of seasonal but profitable jobs and use the extra cash to wash away your debts. Ensure the job you take won't interfere with your full-time work. It'll be unrealistic to focus more on a side hustle, yet it gives less money. The good thing is you'll pay your debt faster without sacrificing a lot.
The Bottom Line
Paying off debt isn't easy for anyone. Everyone is dealing with different debt. It's possible to be debt-free. However, it's not a one-touch thing, and it'll take effort, time, and sacrifices. Having a strategic plan will make it easier for you. Come up with a realistic strategy, follow it, and see how successful you pay all your debts. This is doable, just choose the best method, and all shall be well!