How to get out of debt comfortably?
Finding oneself in debt can be overwhelming. Large amount can seem to be daunting and hard to overcome however getting out of debt is possible, it may just takes time.
The key to debt repayment is to take it one by one, listing the priorities and finding extra funds to repay and avoid incurring more unnecessary debts.
Some ways to get out of debt is to first:
- 1. List them all out, everything you owe
Listing them all out gives you a detailed and clearer picture of where are you at. Write everything that you owe, including credit card balances, personal loans, auto loans, student loans, mortgage and any other debt. With these, do record payment information down as well and calculate the total minimum needed to pay monthly.
- 2. Decide how much you can pay
While you are paying your minimum monthly, that will keep your payment history in good shape however that will mean you are paying more interest and staying in debt longer. One should be paying above the minimum so that you can get out of debt faster.
You may need to calculate your monthly expenses by using a budgeting factsheet or an app tracker. Compare your expenses to income and cut non-essential expenses or increase your income by finding a side hustle or taking extra shifts.
- 3. Reduce interest rates
Reducing interest rates is one way to get out of debt more manageably however it will not be easy. You may request from your lender for a lower rate. Alternatively is to consider a debt consolidation plan. This can help you to save on interest and streamline the debt by combining multiple balances into one lower interest loan.
- 4. Debt repayment plans
One may need a plan to prioritize paying whichever debts first. Focus on debts such as credit card balances and other loans that you may pay off more quickly. Each time you pay successfully pay off a debt, you are freeing up money to pay other debts.
One of the best thing you could do for yourself is to pay your bills on time and never missing a payment.