What do you usually think of whenever it is the 1st of the month? When you start receiving your bill notices? When you see the due date and the amount that you should pay? Where do you usually start paying and which is your priority among all the bills that you receive? It is frustrating that more and more people these days are getting into a tough situation of debt.
With the availability of the plastic money, more individuals are tempted to shop before they have the money to pay for their expenses.
More are given the chance to splurge more than they can afford.
After a month, the bills pile up and the amount to be paid is more than what is expected.
This will now where the problem starts.
Once you failed in paying the first bill, the second and the third bill will experience the same thing.
What are the best ways to be free from debt? Is there a person who is debt-free? How can you be debt-free? Here are possible debt solutions that you may want to try to achieve a debt-free life.
Self-Repayment Plan.
This is a form of debt-solution where in you resolve the problem alone.
First you have to identify the problem.
It is usually due to overspending and lack of money for payment.
Develop a debt management plan that you can work on.
Trace your expenses by listing down all the things that you spend for.
Do not forget to write everything until the last cent that you spent.
Make sure to monitor and document your spending.
In this way you will identify where your money goes.
Make a debt management plan, stick with it.
Start limiting your purchases.
Buy only the necessary items and try not to charge it with your credit card.
Pay in cash.
Limit your credit card into only 1 or 2 which will only be used for emergency cases.
Pay out your bills, credit cards and loans, especially those with higher interest rates first.
Discipline yourself.
This is the best way to be debt-free.
Debt Settlement.
This is where you discuss with your creditor to lessen your debt to a certain amount that you can afford.
The amount settled is usually 50-75% of the original amount borrowed.
After the settlement, there is a structuring with the payments to be made.
Debt Consolidation Loan.
This is when a new loan is made to pay for the other loans that are combined.
It usually has lesser compounded interest.
One of its advantages is that more loans can be paid at one time.
Another is that it has a longer time for payment in a reduced rate.
Credit Counseling.
This is where the credit company talks with the creditors the amount you will pay.
The amount has lower interest rate and fees.
You will pay through the counseling company which in turn will pay to the creditor.
In this case, make sure to find a reliable credit counseling company.
Cash out Refinance.
This is a debt solution where you have to give collateral, a car or a house, for your debt.
With this scheme, you can avail for a lower interest rate compared with your current credit interest rate.
It is also possible that you request for a lower payment plan through this refinancing.
Credit union.
Credit union is one of the solutions for debt.
Lower interest rates and fees are given on loans if you are an eligible member of a credit union.
Home Equity Loan.
This is a loan wherein you can borrow an amount with the value of your house.
The house is your collateral for this loan.
The amount that can be borrowed is definite and is within a specific time only.
The amount of the loan is tempting because it has low payment methods.
It is not advisable for one to avail of this type of loan because if you fail to pay, you might lose your home due to the unstable rate in the interest.
Insurance.
This is one advantage of having insurance.
You have the option to use the money of your policy, low interest loan and the possibility of not paying for it.
If you fail to pay this loan, it will just be reduced from your original cash value.
Bankruptcy.
If all fails, this is your last option.
It gives you a negative impression in terms of credit standing.
You can not avail for any more loans because you have an identity that you not are able to pay for it.
With the availability of the plastic money, more individuals are tempted to shop before they have the money to pay for their expenses.
More are given the chance to splurge more than they can afford.
After a month, the bills pile up and the amount to be paid is more than what is expected.
This will now where the problem starts.
Once you failed in paying the first bill, the second and the third bill will experience the same thing.
What are the best ways to be free from debt? Is there a person who is debt-free? How can you be debt-free? Here are possible debt solutions that you may want to try to achieve a debt-free life.
Self-Repayment Plan.
This is a form of debt-solution where in you resolve the problem alone.
First you have to identify the problem.
It is usually due to overspending and lack of money for payment.
Develop a debt management plan that you can work on.
Trace your expenses by listing down all the things that you spend for.
Do not forget to write everything until the last cent that you spent.
Make sure to monitor and document your spending.
In this way you will identify where your money goes.
Make a debt management plan, stick with it.
Start limiting your purchases.
Buy only the necessary items and try not to charge it with your credit card.
Pay in cash.
Limit your credit card into only 1 or 2 which will only be used for emergency cases.
Pay out your bills, credit cards and loans, especially those with higher interest rates first.
Discipline yourself.
This is the best way to be debt-free.
Debt Settlement.
This is where you discuss with your creditor to lessen your debt to a certain amount that you can afford.
The amount settled is usually 50-75% of the original amount borrowed.
After the settlement, there is a structuring with the payments to be made.
Debt Consolidation Loan.
This is when a new loan is made to pay for the other loans that are combined.
It usually has lesser compounded interest.
One of its advantages is that more loans can be paid at one time.
Another is that it has a longer time for payment in a reduced rate.
Credit Counseling.
This is where the credit company talks with the creditors the amount you will pay.
The amount has lower interest rate and fees.
You will pay through the counseling company which in turn will pay to the creditor.
In this case, make sure to find a reliable credit counseling company.
Cash out Refinance.
This is a debt solution where you have to give collateral, a car or a house, for your debt.
With this scheme, you can avail for a lower interest rate compared with your current credit interest rate.
It is also possible that you request for a lower payment plan through this refinancing.
Credit union.
Credit union is one of the solutions for debt.
Lower interest rates and fees are given on loans if you are an eligible member of a credit union.
Home Equity Loan.
This is a loan wherein you can borrow an amount with the value of your house.
The house is your collateral for this loan.
The amount that can be borrowed is definite and is within a specific time only.
The amount of the loan is tempting because it has low payment methods.
It is not advisable for one to avail of this type of loan because if you fail to pay, you might lose your home due to the unstable rate in the interest.
Insurance.
This is one advantage of having insurance.
You have the option to use the money of your policy, low interest loan and the possibility of not paying for it.
If you fail to pay this loan, it will just be reduced from your original cash value.
Bankruptcy.
If all fails, this is your last option.
It gives you a negative impression in terms of credit standing.
You can not avail for any more loans because you have an identity that you not are able to pay for it.
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