Guide: How to quickly get rid of loans and debts?
When from month to month expenses exceed revenues, a credit card is used, with which it makes up for the lack of money. The tendency to use credit to secure a family is dangerous when it becomes chronic. Once a borrower is faced with the fact that the credit card is empty, the debt has accumulated, and a debt pit looms ahead. Many people in Russia now face a similar situation. All the more relevant is the topic of overcoming the crisis and fundamental changes in the financial condition of a person.
Despite the sad situation, it is never too late to stop the vicious cycle of mindlessly using loans and reaching a new level of life. We do not call everyone to become oligarchs, it is enough to master the science of financial management. With the help of the scheme proposed below, it will be possible to permanently get rid of credit slavery.
We systematize information about debt obligations
To understand the scale of the trouble, it is necessary to digitize it and reduce it to a single amount. Specify the exact amount of debt for each card and loan taken. Include money borrowed from friends and relatives. For information to be visual, summarize the information obtained in the table.
Often the sum total is surprising. For some, the amount of debt is not as overwhelming as it seemed. Others realize that difficult times ahead are coming, requiring immediate action. In any case, to fight the enemy, you need to see it clearly.
Do not fall into despair, seeing unsustainable payments in the table. It is time to realize their own mistakes and stop replenishing their collection.
A table with debts is drawn on paper, or an Excel file is filled out, with columns indicated:
- overpayment percentage;
- account balance;
- The amount of the required monthly payment.
When all amounts of loans are visible, in full view, it’s time to move on to the analysis and emphasis on payments.
Determine the priority
Surely the bad debt was formed by adding up several outstanding loans and debt payments. Some of them must be repaid first, by all means. Other patents are less important and do not require an urgent solution. When working with a table, it is easier to understand which payments should be emphasized. Pay attention not only to the overpayment and the amount owed, but also to the consequences that the late payment will lead to. For example, the interest on a mortgage loan is insignificant, however, delays threaten the loss of property that is pledged to the lender.
When there is a mass of debts, allocate loans among them:
- high stakes;
- minimum amount;
- important for the consequences of delay.
These parameters will help to prioritize loans and determine the order of action. If you are unable to fully cover the debt on a credit card, start making amounts in excess of the mandatory payment. So you gradually reduce the amount of subsequent payments.
Look for reasons that make it difficult to pay.
The first rule in getting rid of credit obligations is to be punctual and organized. Often, overdue debts occur due to trivial absent-mindedness, which gives the lender the right to charge an additional penalty for late payment.
It is easy to become a disciplined payer, if you determine the motives, why you need to pay on time. For example, the reason for compliance with the schedule will be the desire to get rid of calls from creditors, problems with credit history, to get rid of a heavy credit burden.
To avoid the temptation to spend part of the money from the card, do not store it in your wallet and under no circumstances take your credit card with you when you go shopping.
Autopayment is a convenient feature that guarantees timely payment. To set up an automatic credit card payment from a debit plastic, use a personal account or bank terminal.
Learning to plan
To pay off creditors, you need to set tasks and develop an action plan. At first, it will be difficult to cope with current loans and at the same time work on reducing the amount of debt. Most of the income will be spent on loan payments. However, as the number of creditors decreases, life will gradually improve.
To have free money, you need to reconsider their attitude towards them. Every purchase must be considered in terms of benefits and necessity. Following the loan repayment plan, work on reducing monthly expenses and generating revenue.
Look for ways to reduce overpayment
To take out loans is easier if you take measures to reduce the percentage overpayment. Each ruble, accrued on interest, postpones the moment of exemption from credit bondage. Thanks to various methods, it is possible to reduce overpayment on the loan, concentrating on repayment of the main debt.
It is worth considering the option of obtaining a loan from a bank that offers a lower rate:
- To issue a loan in the status of a payroll client. Confidence that you get a steady income on the debit plastic of the bank will help to achieve a profitable lending offer.
- Get a low interest in the bank where the deposit is kept, or other banking services are issued. The higher the creditor’s credibility, the greater the chances of obtaining a soft loan.
- Apply for a refinancing program. If the terms of cooperation with the first lender do not suggest the possibility of refinancing the current loan, study the offers of other banks. In the struggle for each client, a new lender often offers a reduced percentage of a targeted refinancing program with repayment of expensive loans and transfer of liabilities.
To achieve a reduction in the rate, you need to prove the reliability and responsibility. The absence of overdue payments on the latest loans increases the chances of revising the terms of lending. If you could not immediately get a loan on favorable terms, use the new loan in order to close the more expensive obligations.
When the program involves a differentiated calculation of the payment, the overpayment on the loan is reduced due to larger payments than suggested by the lender’s schedule.
We work on ourselves
Debt does not happen to those who do not lend. Gradually reducing the amount of credit debt, closing one loan after another, think about how much money was lost as a result of the neglectful use of borrowed money.
You have to learn how to live without using credit cards, i.e. “affordable”. The main secret of the lack of debt when expenses do not exceed revenues. Great assistance in this matter is provided by the preparation of a financial plan, which takes into account the upcoming payments and the costs of current needs, as well as planned allocations to create savings.
Analyze the items of expenditure, identify and discard purchases that are not in great need.
Additional income gives connection cashback and accumulation of bonuses. When purchasing the goods of the lender’s partners, they often receive a discount returned to the card account at the beginning of the next month. Cashback helps to reduce costs from 1 to 30%, depending on where you pay with a card.
As you reduce the amount of debt on loans, begin to save some of the money from each receipt. In the role of a financial cushion, there is a savings account where 5-10% of crediting is automatically deducted. Gradually, savings will bring additional income in the form of deposit interest, if you open a deposit with interest capitalization and the function of monthly replenishment.
Whatever the position of the debtor at the beginning, consistent actions to reduce the percentage overpayment and current expenses will turn the situation in a different direction. Instead of paying your debts, you will go to create capital that will work for you.
The possibilities are endless
Almost every borrower who has become dependent on loans complains about the lack of money, which does not allow him to get rid of lenders. After a thorough review of expenses and reducing reckless payments, it’s time to think about getting more.
It is not necessary to strive for career flights to get more. In fact, every day we are confronted with lost profits in the form of lost income from a hobby, refusal to earn money, rent out an empty property (this could be an empty garage, a room or a summer house).
The development of the Internet has greatly simplified the process of making money, allowing to receive orders through the network. Sewing, knitting, cooking, beadwork, mounting rollers and photography – all these are hidden chances to organize your business and earn income
There is no doubt that every borrower will cope with loan payments. The main thing is to have a strong desire and to follow the plans for the creation of savings, which will save you in the future from having to ask for money again.