Finance

How to pay off a big debt

Most people drag on debt for years because they can’t find how to recover from too much debt. However, the problem is often not that there is no money, but that a person is used to a certain level of comfort and does not want to give it up. In fact, they can find additional money to recover from too much debt without compromising their quality of life.

But what really needs to be done here are details:

Rule 1: Don’t Be Afraid

Fear pushes you to take rash steps, especially if creditors put pressure. Try to call the closest person and arrange a meeting. Tell everything as it is, without embellishment. Discuss further actions together: letters, calls and any steps one needs to think over with all possible risks.

Rule 2: Pay Off The Smallest Debt

This strategy is also called “Snowball”, it is suitable for those who can set aside a small amount for early payments or make early payments irregularly.

Rule 3: Pay The Debt With The Highest Rate

The essence of the strategy is that the most “expensive” debt with the highest interest rate is paid first.

Rule 4: Don’t Overpay

Since, most likely,  income may be irregular, one  first needs to get rid of as many regular payments as possible so that the amount of debt does not wind up. Penalties, fines, fixed payments, subscription fees for using services – everything needs to be filtered through a fine strainer.

Rule 5: Develop Payout Mechanics

Next,  one needs to estimate the minimum possible income, subtract the amount for life support from them, and take the remaining amount of funds as a resource for eliminating debts.

Rule 6: Calculate Time To Close Debts

For many debtors, it is psychologically difficult to start repaying debts – it seems to them that the amount is very large and it will take many years to pay off. But with early payments, you can pay off much faster.

Rule 7: Find A Side Job

One can find a side job to recover from too much debt. Except the main job, one can try making banners, delivering goods, walking dogs and much more.

admin
the authoradmin