If you have debt you will be certainly looking to get out of it and for that, you must have a plan before you execute it. But the main difficulties are that people do not have any plan and without a proper plan, it becomes very difficult for them to clear their debt and remove their financial burden. Reading finance education articles can also help you in overcoming your debt. In this article, we have come up with some plans that you can implement for getting rid of your debt.
The first thing that you need to do is to gather all your data such as credit card statements, loan statements, or any other bill, and identify all recorded debt. After that, you should check if you are eligible for a lower interest rate loan or any debt consolidation loan. If you are eligible for then you must take that loan and pay your old debt. Again you can make a list of your debt and income in which you should include creditor’s name, balance, minimum monthly payments, interest rate, etc. You must also include family loans, medical bills, recurring bills, groceries, utilities, etc. Apart from that, you must note how much you need to pay for zero-out the debt’s balance within three years or for a particular timeframe.
You must pay more than what you should have to pay as per your bill. For example, if you have to pay Rs. 5000 as per your bill you can pay Rs. 6000. However, make sure that there is no prepayment penalty. If you want to pay extra you can pay the extra payment for your principal amount and not for the interest rate. The most important thing that you have to do to clear your debt is to earn more money and spend less money. There are various ways with the help of which you can save some money especially by doing some extra work and you can pay that saved money as an extra payment so that you can clear off your debt more quickly.