It’s normal for people to acquire debts—whether to fill their needs or wants. But carrying a huge total debt amount on your back is a horrible predicament. It pulls down your credit scores, runs the risk of repossession and can even put you behind bars on worst-case scenarios. That’s why you want to pay your debts faster and free yourself from all those financial troubles.
Thing is, you must not make the mistake of getting another loan to pay all existing debts. Yes, the propositions of debt consolidation and debt settlement sound great. But they both lead to even bigger debts burying you.
Hence, you want to know the best practical tips to free yourself from debts. These are no easy steps, though, but it’s harder to face the consequences of leaving your debts piling up.
Steps to pay your Debts faster while Staying Away from more Loans
Pay more than the Minimum
A large lump sum of loans is divided into multiple payable chunks which you must clear on a given timeframe. For example, when you get a mortgage loan, you must pay an agreed amount back plus interest rate each month. But nobody stops you from paying more than the minimum. If you’d aim to pay more than the minimum each month, you’ll clear an entire loan faster.
Say, you have multiple loans to worry about. Consider using the debt snowball. Start paying more for the smallest debt, while aiming for the minimum on larger loans. Once you clear the smallest loans, you can put your extra payment on the next smallest loan and so on. Continue this pattern until you pay your debts for the largest loan.
Aim for more Earnings
Find ways to increase your income so you can pay your loans faster. Think of working a second or seasonal job, or aim for job vacancies with higher pay. Doing sidelines are also great, such as offering lawn mowing services on Craigslist. Moreover, consider selling household items you’re not using anymore, such as extra appliances and old but great looking clothes.
Follow Proper Lifestyle
Now, you’ve come up with a strategy to pay your debt, and have aimed yourself towards more earnings. The next step to do is to curb your lifestyle accordingly.
This circles on spending less on things you don’t need. Also, avoid expensive hobbies such as going to your favorite restaurant for a hearty dinner. Even curbing drinking habits can help you a lot as well.
Yes, this sounds difficult to do, since it basically robbing big happiness from yourself. Thing is, you’d surely enjoy more of those things once you’ve paid your debts faster. If you won’t, it would take you a long time to enjoy your hobbies without debt worries.
Pay Properly and Negotiate
Be sure to pay your loans on time and always follow the minimum amount. Aside from clearing your debts faster, this would give you good negotiation leverage,
That’s because it gives you a good credit record. If the lender notice you’re a good player, they’d probably give you a chance to negotiate your interest rate. It sounds untrue, but this actually happens every now and then, and you can’t miss it.
Keep these things in mind to pay your debts much faster. Yes, it’s easier said than done, but it won’t hurt a try. In fact, it would help you to enjoy a debt-free life later on.
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