No one likes to live on debt, but it can inevitably happen. Debts should not be ashamed – this is a problem that thousands of other people have also had. The most important thing is that you deal with it and try to get rid of debts. Here are some tips that will hopefully help you get your life in order and clear your debts.
Unfortunately, indebtedness and money problems are by no means a strange topic for most of people. Debt relief seems like a distant dream.
While it is easy to criticize bad financial decisions, you should definitely not be ashamed if you are in debt. In reality, debts are quick to arise, and you may fall into a debt vortex unnoticed, and getting rid of it is not an easy task. Read further here.
Why are debts so easy to attain?
The basis of the problem is simple: we live in a consumer society!
Shopping malls are popular places to spend time and products are evolving fast: every year a new and better phone model, laptop, TV, new games, movies, newer clothes come out. It is perfectly normal to wish for all the best and better, but beyond your capabilities.
Excessive consumption is not always the backbone of indebtedness, but simply low-wage work and high household expenses – it can end up being difficult to afford basic things. A quick loan is an easy and quick help at the end of the month, but this is how the bills start to pile up. In general, every debt burden starts with one stupid decision. However, this does not mean that it is not possible to put your life and economic situation in order – for this you need proper discipline and a plan to follow.
How to get rid of debt?
Understandably, you may feel stuck and it seems like your debts will never be paid. Monthly loan payments eat up so much of your income that there is no money left for the rest. You feel like you’re running headlong into a wall, and making money doesn’t pay off, it just goes to the “loan package”. We will give you some advice on how to deal with this situation and what to do to get out of debt.
It all starts with acknowledging the problem
The problem cannot be solved until you realize that it is a really serious problem that will not solve itself, and if you continue to spend or worse, you will avoid paying the debt and postpone payments, the problems will accumulate and get bigger. So, to get started:
- Write off all debts and their actual balances. If you do not know the exact balances, ask the lender.
- Create a budget that includes all other monthly expenses and your
This will give you a clearer idea of how your money is distributed each month. The first thing you need to understand is how you can set your expenses or what you need to do to make loan payments better. Start monitoring your expenses on a monthly basis, and when shopping, think: “Is this purchase really necessary?”.
This even applies to the grocery store – sometimes you can reach for a pack of chips or expensive drinks, but are these purchases necessary? Even a little in savings means a little more that you can spend to pay off debts. That’s the way you need to think.
Once you’ve budgeted and got a clearer picture of your costs and revenues, set monthly goals – or even weekly goals. The purpose may be, for example, to make a certain payment or to carry out some activity that generates income.
When you set monthly goals, you also have a clear goal in mind, and every time you meet a goal, you have a pleasant sense of accomplishment in your heart. At first, such a system does not seem to change, but in a few months you will see the difference and notice how debts will decrease.
Refinance loans or change the payment schedule
If you have several different quick loans, consumer loans or credit cards, combine them into one loan using the refinancing option of one of the lenders. Interest rates on small loans are usually much higher, and if you have several different small loans, the interest rates are in total significant.
Therefore, it is wise to combine everything into one loan – this will also make it easier to monitor your progress and save you significant interest. Know everything on the loan terms, by reading here. If you already have one major loan that is having difficulty, talk to your lender and try to reach an agreement on a new payment schedule that is feasible for you on a monthly basis. Most lenders allow you to extend your loan and also provide loan “holidays”.
What if the lender does not agree to change the payment schedule?
You may have already asked for a change in the payment schedule, but the lender has not agreed to it? This does not mean that the story is over. It could mean that you didn’t ask correctly. Keep in mind that lenders are likely to receive dozens of requests each month from people who are simply trying to get out of paying. Lenders need to be careful, because unfortunately there are malicious people who take advantage of lenders.
If you want the lender to be able to sympathize with your situation, show the lender your actual financial situation:
- Show the lender your recent bank statements showing that you really don’t have more money than you claim to have;
- Get a detailed budget from the lender so that the lender can see how you plan your money;
By doing so, you have at least properly substantiated and proved your situation. Even if the answer is no, you know at least that you have given your all. But don’t expect the lender to simply believe you when you say how bad your situation is and how you don’t get along right away. Lenders want to see real proof because too many people are trying to deceive them.