Being in debt is fairly normal for most people nowadays – there's usually no big deal when it comes to getting a credit card, purchasing a car on finance, or mortgaging your home. However, being in too much debt can quickly start to cause problems for you with your finances, making it difficult to save money for your future and even getting in your way of obtaining other financial products.
If you are struggling with a lot of debt, then it can seriously impact your life in a number of ways. A large amount of debt often equates to a poor credit rating, which can not only make it difficult for you to borrow money in the future when needed, but can even get in the way of certain jobs, for example, if you want to work in finance or public services. Thankfully, there are several things that you can do to get out of debt as quickly as possible and begin working towards better financial freedom, a better credit rating, and more free money to save for the future. Here are our top tips for getting out of debt fast.
Tip #1. Speak to Your Creditors:
When it comes to getting out of debt as quickly as possible, the best thing to do is try and come to an agreement with your creditors. If you are struggling to meet the minimum payment requirements each month, then it will likely take you longer to pay off your debts. However, if you are able to come to an agreement with your creditors to reduce the payment amount or even come to a settlement agreement to pay the rest of your debt off for less than is owed, there's a higher chance of you being able to clear it faster. Bear in mind that most creditors are always going to be happy to help you find a way to pay off your debt as quickly as possible; they would rather get some money back than none at all!
Tip #2. Try Debt Consolidation:
If you are still able to borrow money, then it might be a wise idea to consider a debt consolidation loan. If you're hoping to clear all your debts as quickly as possible, then this is one of the best ways to go about it, since you will take out a loan that you can then use to repay all your debts in full, leaving you with just one, simple monthly payment to make each month rather than several different payments. As a result, you'll no longer need to worry about making regular payments to several different lines of credit, and any issues that you had with your old debts will be dealt with quickly. As long as you keep up with repayments on your debt consolidation loan, you'll be able to improve your debt situation quickly.
Tip #3. Seek Expert Advice:
If you are in a stressful situation with the amount of debt that you are in, then it may be worth seeking expert advice. There are several charities and companies available who focus on helping people to get out of debt and improve their credit score. You may be able to get a debt management plan, for example, where all your debts are consolidated into one manageable monthly payment until they are paid off. The amount that you pay will be determined by looking at the amount that you earn each month and taking your priority bills and expenses into account, before finally using the amount of disposable income that you are left with to decide how much you are able to afford to pay comfortably. Or, if credit score restoration is something that you are interested in, see https://creditrepaircompanies.com/credit-saint/.
Tip #4. Consider Cutting Costs:
If you are struggling to pay off a lot of debt each month, then it could be worth looking through your monthly expenses and considering if there are any areas where you could be saving money. For example, do you have a gym membership that you rarely ever use? Or, maybe you're paying a lot for a cell phone bill, but are wasting a lot of your usage at the end of each month. It pays to go through your monthly expenses and try to see where you are spending more than you need to – you may be surprised at the amount that you can save! By cutting your expenses, you'll have more money to dedicate to paying off your debts and will be able to clear them quicker.
Tip #5. Use a Balance Transfer:
If you use a credit card and the balance is increasing due to the interest rates, then you might want to think about searching around for another card with a lower rate of interest which will allow you to do a balance transfer. When you transfer your credit card balance from one card to the other, you'll be paying less each month – even better if you can get hold of a credit card which is interest free for the first few weeks or months, since this will give you some breathing space to pay off even more of the amount that you owe.
Tip #6. Evaluate Your Spending Habits:
By going through the amount of money that you spend each day, you may be surprised at the amount that you can save by simply cutting down. Along with looking at your monthly expenses, take into account the amount of money that you spend on things such as coffee while you're out, lunch at work, or even drinks at the weekends with colleagues – you will be surprised to see how much it can all add up to. Making small changes such as taking your own food into work or taking buying instant coffee instead of heading to Starbucks can make a massive difference to your money and leave you with more available to pay off your debt.
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Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.