4 Simple Steps to Help You Manage Your Debt
Nowadays a large percentage of the population is in some form of debt. Whether your debt is large or small, it still needs to be managed. The first thing you should do is carefully monitor all your incoming repayments, and follow the below tips, which will help you repay your debt faster.
1) Know how much debt you own, and to who you owe.
First of all make a list of all your debts, including information about creditor, the total amount of the debt, the amount of monthly payment, and the date you would finally pay it off. Keep the list at hand, and make updates as needed. Without having updated information about how much debt you own, it is difficult to develop a plan to clean it up.
2) Make a calendar
Make a calendar on your personal computer or phone with information of coming payment dates and amounts. Do not miss any payments, and strictly follow the deadlines. Missed payments can charge you extra fees and interest for late payment and can trigger reporting to credit bureau which can adversely impact your credit worthiness in future.
3) Figure out minimum payment amount
You must know very well how much you have to repay during the month. Plan the outflow of the funds. If your financial status makes you capable to pay extra amounts, do it. With extra payments you will pay off the debt faster. First of all, get rid of the loans which have high interest rates. These are usually credit cards. Start from the credit card with the highest interest rate. Also, make extra repayments on your mortgage. The extra payment on a mortgage can significantly shorten the length of the mortgage.
4) Think of Refinancing
Always keep your eye on other loan options. Review the interest rates offered by concurrent credit companies, and if there are options with more comfortable terms for you, then refinance your loans. It can be an option for you to get rid of small loans by refinancing them with one larger loan. This can help you to reduce the quantity of payments you do during a month, and you no longer have to remember all repayments and dates. This also can bring the interest rate down, because usually small loans have higher interest rates than larger ones.