The calculation states that an average person owes about £9,800, and that’s where we too fit in usually. Many peope are looking for liberation from the prison known as debt. Due to the increase in the unemployment rate by 10% many people are finding it difficult to pay off their debt.
Debt comes down as a curse and destroys your mental peace so try to avoid being a victim to the debt problems.
If you are willing to come out of the trap of debt then you need a proper guidance of a financial advisor. He would assess and locate your issue regarding finance and help you with proper suggestion. This article would throw some light on different ways how you can escape from the maze of debt.
Steps to liberate you from debt:
- Calculate all your pending bills: You need to know the exact amount you owe so calculate all the bills together including the interest rate levied on the outstanding balance. Get hold of all your credit card statements and make a list of the interest rates, total owed amount and the minimum monthly payments. Give priority to the card by the interest rates they charge. And high interest rate cards should top the chart as it needs to be paid off quickly before the soaring interest increases the outstanding balance.
- Go for a debt settlement program: If you are thinking of getting rid of the debt then a debt settlement programme can help you. They negotiate with the creditor on your behalf and lower the outstanding balance as well as the interest rate to an affordable amount. Once you enroll with the debt settlement program the creditor would stop harassing you as they would find a fine ray of hope to get back their money.
- Maintain cards with lower interest rate: If you are planning to keep two cards then keep it with the lowest interest rates. Try to get hold of a card with interest rate less than 14%. Avoid the use of high interest rate cards. Close the accounts by informing your card issuers. Before the cancellation of the card, go through the terms and conditions. Credit issuers might penalize you with higher interest rates on the outstanding balance if you choose to close the account. If you come across the same problem then make sure that you pay off the debt and then cancel the card.
- Transfer you balance from higher interest rate to a lower interest rate: Try to consolidate your debt as it would make the repayment process much easier. If you are keen to get out of debt then transfer your high interest rate balances to a card with an extremely low rate of interest and then start paying them off. As many credit card issuers offer preliminary rates as low as 3.9% for six months this is the time to transfer all your existing balance and to pay off your dues.
- Save and pay off your debt: Prepare a balance sheet and pen down the entire amount you need to pay back. If you maintain a budget then it would be convenient for you to keep a track of the flow of cash. You can even trace whether your income exceeds your expenditure then this would help to keep a check on it. Keep aside a portion of your salary in to the savings account so that you can pay off your debt with the money you have saved.
These are the few basic tips that would pave your path to a Debt Free life. Follow these simple rules then you can easily escape from the trap of debt.
