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Decrease Your Debt with These Handy Financial Hacks

Posted by : Premraj | Posted on : Monday, July 24, 2017

out of debt

We all know that debt can be a rather touchy subject. It’s certainly not something that people enjoy thinking about. Yet, almost every adult owes money in some shape or form, whether it’s a student loan, finance on a car, or an outstanding credit card balance. So, you’re certainly not alone if you’re dealing with cash flow problems.

The key to solving them is to seek the right kind of help. Ultimately, nothing is worse than finding yourself unable to meet payments and ignoring it, in the hope that the situation will go away. It really won’t. The only answer is to be responsible and work with lenders to settle debts in a way that you can afford.

This guide to reducing your debt will give you some advice on how to turn things around.

Debt Consolidation 

We’ll start with the big one. Taking out debt consolidation loans with Latitude Finance or another provider should be easy and stress-free. This type of credit is designed to give people relief from multiple, unmanageable debts.

It works in a very simple way. The lender gives you a loan big enough to settle all of the individual debts. Then, you pay the money back in monthly installments to this lender only. The goal is to roll all outstanding sums into a single, easy to manage payment plan.

Debt Organisation 

Usually, debt consolidation is only recommended for those with no viable way to continue paying off individual creditors. It’s best to consider alternative options before you consider it. For instance, have you tried collating all of your payments into one straightforward list?

This is a worthwhile process because it will help you identify the biggest commitments. You should aim to draw up a list of the creditor names, amounts owed, and any associated interest rates. The ideal scenario is then to priorities the largest debt by paying off more each month.

Debt Prioritization 

The exception is for any debts with high interest rates. Even if they aren’t the biggest amounts owed, they could quickly match the rest if the interest is allowed to build up. Where possible, priorities these payments.

If you have to pay less on other sums, with lower interest rates, in order to pay off the high rate faster, this is what you should do. Although, it’s still important to be paying at least the minimum amount on as many of the debts as you can. This will stop them getting any bigger.

Debt Prevention 

If your big vice is credit card shopping, there’s an easy fix. You need to get rid of the cards, either temporarily or for good. You certainly shouldn’t carry them around with you when shopping or on the high street. If the option isn’t there, the temptation won’t become a problem.

While it’s true that we’re becoming an increasingly cashless society, you can still manage most payments (certainly outside of household bills) with physical money. Start drawing out a set amount of cash and leaving your cards at home. When you’re out, you’re out and that’s it.

When to Consider Debt Consolidation 

There are all kinds of tips and tricks that you can use to save money and shrink monthly spending. They range from cutting back your cable package to eating homemade lunches at work, splurging less at the supermarket, and even selling unwanted items online.

However, if you have tried many of these strategies and you’re still struggling, it could be time to consider debt consolidation. It is a great choice for anybody trying to juggle multiple payments, to multiple creditors. Crucially, if you keep up with payments, consolidation has no effect on your credit score.

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