Financial debt can be useful when handled efficiently. Problems arise when one struggles to keep up with monthly payments. There are various ways of overcoming financial debt.
How debt counsellors can help:
These are trained individuals who have the expertise to help you clear your debt. They communicate with creditors on your behalf and work out a plan that will help you cover your living expenses and also pay off your debt. They conduct a full inquiry into your financial situation and make recommendations to you, your creditors and where necessary, the courts. The majority of debt counsellors charge a fee for their services.
The Debt Review Process:
This process provides you with protection from creditors while your debt counsellor conducts an initial investigation into your financial standing. During this period (maximum 60 days) your creditors can take no legal action against you or attach your assets. Your permanent credit record won’t be affected negatively by this process. Debt review can also help you uncover some of the reasons you are over-indebted.
Taking out a debt consolidation loan can help you pay off your current debts. It may have lower interest rates, resulting in lower repayments.
Keeping track of banking interest rates:
It can be quite challenging to manage interest charged on credit card payments, but it’s important to pay on time. If you miss your credit card payments, this can result in debt being accrued faster than it can be repaid. A debt consolidation loan can help in such circumstances.
Practical things you can do to get out of debt:
- Negotiate with your creditors. They may let you pay some of the debt upfront and agree on a lower interest rate that saves you more money in the long run.
- Weigh up all the financial factors that may have led to you falling into debt.
- Consider taking out a home equity loan against the value of your home.
- When consolidating debt, consider interest rates and the length of the repayment period.
- Change your attitude.
Make a concerted effort to manage your money in a more responsible way.