There’s no doubt debt is a drag. But if you’re looking for simple strategies to make your financial situation easier, like taking Debt Consolidation Loans, look no further. Here are some tips that can help you get better control over your debts and find freedom from them.
Knowing the details
Managing your credit score and interest rate are the first steps to getting your debts under control. Your credit score is a number that indicates how likely you are to pay back what you owe; the higher it is, the more likely lenders are to lend money to you. A good credit score will also help lower your interest rate on any loans or lines of credit. Knowing this information will allow you to be better prepared when applying for new loans, which could save significant amounts of money over time.
Finally, knowing the minimum payment on your debt allows you to see how much extra income would be needed each month for all of your bills and expenses (including those with high-interest rates) not only be able to be paid off but also save up enough money. Hence, they no longer need to make payments at all.
Keep your overview simple
The first thing you need to do is get organised. Keep a notebook of your debt, and write down the date of each payment, how much you paid and how much you owe on each account. Also, write down the interest rate you are paying.
Now, look at the big picture: how long before all your debt is paid off? If it seems like it will take forever (and bear in mind that five years ago, no one imagined you would still be paying off your mortgage), then come up with some way to speed things up.
Check for errors
If you want to stay on top of your debt, the first step is to make sure your accounts are listed correctly. Many people take their credit report for granted and never check it, but doing so can reveal errors that could cost them money.
Check if all your accounts are listed by pulling a free copy of the report annually from major credit bureaus. These reports must match up with one another; if there’s an extra account included in one report but not another, contact the company directly to have it removed from your record; this type of error will hurt your score more than any other kind (credit cards tend to be easier than loans).
Once you’ve checked for accuracy, examine each account individually: Is the current balance correct? Is the payment history accurate? Were late payments reported when they weren’t? Do interest rates seem high or low compared to what other lenders might offer at similar risk levels?
Leverage balance transfer deals.
Balance transfer deals are exactly what they sound like: a way to transfer a balance from one credit card account to another. This can be advantageous because you can get an introductory rate of 0% APR on all outstanding balances between 12 and 21 months.
As long as your credit score is at least 650, you should be able to get approved for a balance transfer offer with no annual fee (and sometimes even with one). Some cards even offer rewards on top of the low rate.
Consolidate your debts
A comprehensive view of your debts is a good idea if you have multiple debts.
- Debt Consolidation Loans can help reduce the number of times you pay interest and avoid penalties for late payments.
- It can also help you to manage your finances better by giving you a lump sum figure of savings/financing expenses.
These were a few helpful strategies for keeping your debt under control. Balance transfers might be your best option if you’ve ever struggled with high interest rates. And if consolidation is more your style, then consolidating all of your debts into one credit card may be the solution to get rid of what could be scaringly high and scattered monthly payments.