Debt management is not easy for people with a limited income and plenty of expenses. You somehow manage to make the end meets after paying the instalments for your loan. And a sudden expense ends up ruining the entire effort to increase the liabilities in your profile.
Therefore, people seek advice from financial planners to gain control over their debt situation. But you don’t have to pay them for a task that will only take a few hours of your time. You can create an effective repayment strategy by yourself to get rid of the stress from the endless cycle of debts.
You can manage to pay the debt even before their originally decided duration to save money on the interest rates with a small income. Start with prioritising the debts to repay the ones with high interest rates to cut their overall cost. If possible, take a debt consolidation loan to get lower interest rates on the same loan amount.
You can also start a side hustle to increase the income with an additional source. Use your professional skills to sell products or services online or become a freelancer. Contact a direct lender for online loans in Ireland to cover the initial cost of setup.
While the above methods will make the debt repayment manageable for small incomes. You need a thorough plan to repay the debts with your existing financial condition. Following are some tips that will help you create an effective strategy for debt repayment.
You can negotiate with the lender to get a better offer on the loan application. It is a healthy practice in the financial industry to make the loan affordable for your financial condition. Even a slight difference in the interest rates can help save significant money in the long run.
However, you will find some loan offers hard to negotiate because the lenders take good care of your affordability. At MyCreditBucks, we provide personalised solutions for the applicant to provide the best possible offer for a profile.
Nevertheless, you can compare offers from different lenders to reduce the interest rates on loans. As mentioned above, you can use a debt consolidation loan to repay the loan with high interest rates. The option to transfer balance in credit card is also available to lower the interest rates on the instalments.
Debt management services offer a reduced cost of paying for your existing liabilities. Some even provide services to eliminate the debts to help you achieve financial freedom. And they ask for a substantial fee for these services to “help” the customers.
You don’t have to pay them a single dime because their services are unnecessary in most cases. Keep an eye on their methods to get results for your profile, as unethical measures can do more harm to your profile. Also, make sure the loan discharge is visible on your tax return to avoid a visit from Uncle Sam.
A credit card balance transfer can help reduce the interest rate on your existing debts. However, the process may not result in reducing the overall cost because of the different charges. The current service provider may charge a fee for the balance transfer.
Some service provider also increases the interest rates after the end of the introductory period. Instead, you can use an asset for security to get lower interest rates on the loan offer. Or, contact a direct lender to get lower interest rates if you are looking for instant loans in Ireland with security.
The stress from budgeting gets overwhelming if you try to make significant changes in your lifestyle overnight. You will start to lose motivation after a few weeks only to return to your previous lifestyle. Thus, the entire efforts on the debt repayments are wasted with success for a very short duration.
Instead of eliminating the small amenities and luxuries, learn to savour them with occasional splurges. It is okay to enjoy a weekend trip with your loved ones after achieving a financial goal. Do some activity that offers happiness for a longer duration instead of those mindless purchases.
Debt repayment is a process that can take months or years based on the current liabilities. You will not achieve those goals if you set unrealistic expectations from the repayment strategy. Give the repayment process enough time to avoid setting yourself up for a certain failure.
You can create small milestones to keep track of the repayment goal. It will help make changes to your existing strategy if you want to increase or reduce the set expectations. A successful strategy for early repayment of debts is formed after a few failed attempts.
Therefore, do not lose motivation after a few failures or mistakes with your repayment efforts. Remain consistent with your goal to achieve financial freedom at last. More importantly, give your debt repayment strategy time to show results instead of frequent rushed decisions.
Getting rid of a debt situation is indeed a difficult task to achieve all by yourself. You need support from a close friend, family member, or partner to create a more effective strategy. Share your progress with them to get the required motivation.
Furthermore, let your partner manage the minor expenses to put your focus on the debt repayment goal. If you don’t have someone for support, try the online communities of other people with the same debt situation. You will get the platform to share your progress and achievements with other members.
To sum up, you are in deep waters if you are stuck with a debt situation and no strategy for repayment. The abovementioned tips will help create an effective strategy to get rid of debts early. However, you need to remain consistent with the efforts if you want to avoid the same situation in future.