Having a huge pile-up of dues and rents that you simply cannot find a way to clear off can seriously damage your financial profile. Especially when you have big plans of borrowing any type of loan in the future either for buying a house or car, you need to have a good credit score and financial profile.
But the real question here is how can you manage a good credit score when you constantly face issues in making ends meet by the middle of the month? In this situation, you are constantly getting behind in paying your dues like bills and rents and it is only a matter of a few months till you face adverse consequences.
There are many ways through which you can find solutions to paying off your debts, one of which includes borrowing from your close ones. But you may not want to do this either because you do not want to be a burden on someone or maybe you do not have anyone to rely on currently. If you ever find yourself in a situation like this and you think that there is no way out, you should look for remolinoassociates.com that provides great advice about struggling with debts and it can get you back on a firm footing. No matter what the situation is, you can still find ways to get out of this overwhelming mountain of dues.
So let’s look at some of the solutions in detail, such solutions that are legal and you can easily utilize.
The Debt Snowball Method
If you have so many debts piling up that range from smallest to largest, it is natural for you to think of paying off the large ones first to get rid of the headache the large sum is causing you. But, when you are trying to pay off the large debts first, you also have to save large from your monthly income. Which results in making you empty within only days of receiving the paycheck.
When this keeps happening for months, you will not be able to come close to paying off your other small debts, which may be small individually but together make a huge sum of money. So, what is happening here is that you are trying to clear off large loans but in doing so you are not able to save anything, you may also not be able to even pay your small rents, and your small old loans are still untouched.
This strategy is not actually helping you, it is rather adding to your financial burden. In this situation, a method “debt snowball” devised by David Ramsay, proves to be helpful. This method tells you to pay off your smallest loans first then move on to the largest ones. David Ramsay based this method on psychology, saying that when you successfully repay the small ones, it gives you financial as well as a motivational boost.
According to this method, you have to save just a little portion of your income to repay the small debt, and you will be getting rid of each debt easily and fast. Since you will be done with the repayment of the small debts quickly, you can then move on to the larger ones with much less stress and tension and can easily save up for them.
Earn From Side Jobs
The other way to pay off your debts is by earning extra exclusively to pay back the loans. You may have a job that gives you decent income but your daily expenditure would be according to your income. It is hard to adjust your spending and cut off on things to save some money for the debts.
Therefore, you can pick up some side hustle like a freelance work or a part-time job, and save all the money you get from it for the debt repayment. This method may not be the easy or convenient one as you will have to work more than usual, so to make it less of a headache, you can pick up anything that interests you.
For instance, you have a full-time job of the sales manager that wears you out but then writing is your way of releasing your stress. So you can pick up any freelance project of writing that you can do at the end of the day to earn more and while you do so, you also get the chance of releasing your stress. Just like that, you can find many art projects if that is your hobby.
Clear Out Some Extra Stuff for Money
Another way that may be the easiest one among all the methods is to sell some of the stuff that you do not use. We all have plenty of things lying around in the house that we have not used since the time they were brought to the house. These things may range from furniture to cosmetics stuff.
You can sell the extra things present in your home through a yard sale or an online sale. The yard sale or the garage sale is the most convenient way to earn some extra money for the debts repayment. You only have to invest a few dollars for the promotion of the sales and price tags that you will be putting on the items. You can go one step ahead and get your neighbors to participate in the sale in return for some commission.
Another great way of selling your extra stuff is putting a sale online, on Facebook or any other suitable social media platform. Nowadays, buy and sell groups on Facebook are gaining much popularity and can generate large traffic. This would not require any investment and all you have to do is to go live with all your stuff on display.
Yard sales do not require you to work extra and invest extra energy in saving money for debt repayment. You can put a yard sale on the weekends, this way you will also get the chance of spending the weekend socializing with people of your neighborhood. And, all you are doing here is turning your extra clutter into a source of earning a good amount of money.
Adopting Some Harsh Saving Strategy
Brace yourself for some harsh cutting down of your expenses if you are insanely and overwhelmingly under the pile of debts that is increasing every month. This method usually works well for those who have a low paying job but if you have decent pay and want to repay the debt faster than you can also engage in it.
This method goes by the name of the bare-bones budget. As you can figure out by the name, this method involves cutting down all of your extra expenses, and by extra we do not mean the cutting down of occasional purchases of the unnecessary stuff you make, but cutting down of all those expenses that do not classify as the basic needs of humans.
That is why we called it harsh and serious because it involves listing down all the expenses from your bills to whatever you buy in a month. The list is based on categories and you can see your regular expenses from your bank statements. Then another category is listed which includes all the debts you have to pay so you know exactly how much you have to save.
Then from the list, you slash out all the expenses that are not your basic needs. The expenses based on your essential requirements include food, basic expenses, and food. This method requires you to strip your expense to bare bones and spend only on things you cannot live without.
If it means you can live without your TV cable, then strike that out from your budget. If it means you can live without large mobile bills, decrease the use of credit to a minimum. After the cutting down of the things, you need to make a new bare-bones budget that includes the expenses of living, basic utilities, food, and basic transportation.
This method alone is enough to get you out of your financial instability but adding even one more method to the mix can accelerate your journey toward financial freedom by a thousand times. You can end up clearing out all your debts plus having some extra money saved in your account that can be used in the future or an emergency.
Consolidate the Debts and Pay Off with One Quick Loan
If you are facing a situation in which you are being hunted down by all of your debt collectors and they are demanding you to pay off all at once, then all the above methods are completely out of the question as all of them require some time to save money. In this situation, your only savior is a quick loan.
Quick Loans as the name suggests are the type of loans that are approved and funded as quickly as possible. In some cases, the process takes only a few hours and even a few minutes, but in some cases, it can span over only a couple of days. These loans are lent by many financial sources like traditional banks, online lenders, non-traditional lenders, and credit unions.
Now if you are wondering would it be a good idea to take another loan for paying off the old debts then you have to evaluate the severity of your case. If you think you will be able to pay off your debts with some time and there is no urgency then you can surely rule this out. But, if you are seriously being affected by your bad credit score for not clearing your outstanding balance due on more than one credit card, then quick loans or personal loans may be the only option you are left with.
There are a couple of factors that you might want to consider before you consolidate your debts with personal or quick loans:
- If your credit score is still reasonably good then you can qualify for a personal loan with lower interest rates. This way, you can cover all your debts repayment at once or maybe within one or two payments, and you would be left with only one personal loan and interest savings.
- Taking a personal is much more effective when you are juggling multiple credit repayments or loan installments that have higher interest rates. One giant personal loan can easily cover all these loans along with their interest rates and strip down your debts installments to only one installment of the personal loan.
- Opting for a personal loan may not be a good idea if you have a debt that can be paid off easily within 10 to 12 months. It is also not a good option when your credit score is extremely bad because then you would end up with a personal loan with much higher interest rates. That would do little in giving you relief from your existing debts and would add to your total financial burden.
The obvious benefits that you will get from consolidating your debts with Quick Loans like personal loans are numerous. Some of them are as follows:
- If you have debts with large installment amounts, you can pay them all at once with the large amount you will get from the personal loan. Then, you can easily pay the personal loan with small installments as its payment schedule usually span over 3 to 5 years.
- If your credit card score is accumulating each month as you pay off little but keep using them for your expenses, you will never know when you will be free of the debt. This situation can be frightening as well as nerve-wracking. Paying off all the credit card debts with a personal loan takes you out of the misery of future anticipation. And, you can easily pay off the personal loan installments that are designed on a payment schedule which gives you a set future date by which you would be free of the loan.
If you take an eclectic approach to money-saving, you would be able to pay off debts faster than you could imagine. And, if you want to clear out the entire pile of debts all at once, then quick loans are your best option.