6 Foolproof Strategies to Get Out of Debt Fast

Personal Finance

6 Foolproof Strategies to Get Out of Debt Fast

June 26, 2018

 

Are you struggling with multiple debts? Is your debt burden seemingly insurmountable? If your answer is yes, you have a similar situation to most households and businesses in Singapore. Of course, most people rely on loans to offset cash shortfalls but this can eventually lead to financial downfall.

Failure to handle debt can lead to bankruptcy, loss of household and business assets, and family breakups among other problems. These are some of the reasons financial advisors recommend proactive strategies in handling ballooning debts.

By settling your multiple debts, you will improve your credit score, improve your savings portfolio, avoid financial strain and in essence improve your quality of life.

Many good families and businesses have collapsed because of debt. To avoid this pitfall, you can use the following smart approaches to settle your debts faster:

1. Know and Own Your Debt

It is common to find many household owners who have been repaying loans for years albeit grudgingly. Such consumers take no effort to understand their loans arguing that banks and credit card companies always win at the end of the day.

Well, you have to appreciate that any loan contract you sign is legally binding and as such you have to know how much you owe in order to build a strategy to clear pending amounts. Knowing your debt makes it easier to prioritize what needs to be paid further to reduce the impact of late penalties.

2. 0% APR Balance Transfer

Credit card companies have amazing introductory offers to lure new customers. These include 0% APR among other good deals and it is possible for you to transfer all your debt for the stipulated time to enjoy these lower rates.

It is possible to juggle your loans and continue repaying them as per the new card requirements and with time, you will notice the impact on your total debt. This works on the premise that much of the repayments you are making to the lender go to interest fees and 0% interest fees will go a long way in reducing your debt.

3. Build a Workable Budget

Of course, everyone knows that a budget is crucial in order to manage finances but you will be surprised to find not many people bother creating one. In an ideal situation, a debt should be made with an objective mind that would require a close assessment of your finances. Check your bank and credit card statements and rethink your spending before drawing up a plan that must be adhered to by everyone in the family.

4. Consolidate Your Debt

Most financial advisors today advise their clients to consolidate multiple debts. It is easier to make one large payment every month as opposed to smaller payments. By consolidating your loan with a reputable company, you will get a more favorable repayment period and lower interest fees.

This improves your cash flow while also giving you much needed peace of mind. Most debt consolidation companies also offer debt counseling to their clients to ensure they don’t fall into the same problems in future.

5. Create a Debt Payoff Strategy

Any journey must have a map if it is to be made successfully. Clearing your debt is such a journey and you should build a strategy. List down all your debts and prioritize what needs to be paid first. The debts with highest interest rates should be cleared first to boost cash flow.

6. Use Professional Help

There are many not-for profit credit counseling agencies whose goal is to help consumers get out of debt. These financial experts will help you take control of your finances after carefully assessing your current situation.

Still wallowing in debt? Why not take these proactive steps to release yourself from this burden while still living a fuller and more fulfilling life?