How to Reduce your Debt in 5 Easy Steps
If you have incurred substantial personal debt, consider these options: budgeting, debt consolidation, credit counselling from a reputable organization and working with your creditors. You will need to choose a debt reduction method that will work best for you? The method you use will depend on your level of debt, how much spare money you have, your level of discipline, and how quickly you want to get out of debt.1. REALISTIC BUDGETINGThe first step towards taking control of your financial situation is to do a realistic assessment of your income and expenditure. Work out how much you earn (your total income) and write this figure down. Then total your expenses.
This is how much you spend each month for rent, fuel, food, clothing, heating, water, electricity and other bills. The difference between your total income and your total expenses is the amount of money available to pay your creditors or lenders.Decide if there are any monthly expenses that you can reduce or live without. Focus on lowering your expenses so that you can increase your income. You'll be amazed at how many things you can do without.a) Debt Reduction MethodsChoose a debt reduction method that fits your situation and gives the maximum benefit. You could choose to focus on repaying debts that are most important to your credit rating or to maintaining your family's safety.
Or you can start by paying off those debts with the highest interest rate thus reducing the total spent on interest charges and increasing the amount available to pay off debt. Alternatively, you could focus on paying off bills with the lowest balances. Then the money used for those payments can go to pay off other debts. If your credit payments (excluding mortgages) exceed 15-20% of your take home pay, you can work with creditors to set up monthly instalments that are more in line with your income.b) Credit CardsTransfer your credit card debts (balance) to a card offering an introductory 0% interest rate for balance transfers. Make sure you keep up the repayments and then just before your 0% introductory offer is up, apply for another 0% card, transfer the balance over before you starting paying interest ? and repeat.
With a good credit record, you could do this for years, moving your debt from one card to another until it's paid off.3. DEBT CONSOLIDATIONThis is when you use a new loan to pay off multiple debts. Your monthly payment will be lower because repayment is spread out over a longer period of time. This will usually eliminate the hassle of having multiple creditors, multiple bills, and multiple payments to make. It's very important not to take out any additional loans until your consolidation loan has been repaid.
Borrowing against your home is a cheap way to raise money, but it's risky. If you can't make the payments - or if your payments are late - you could lose your home. However, you could replace expensive debts with a cheaper personal loan (unsecured loan). Before taking on new debts, you might want to check out your credit history.4. CREDIT COUNSELINGSome people are not disciplined enough to create a workable budget and stick to it.
If you can't work out a repayment plan with your creditors and you can't keep track of mounting bills, consider contacting a credit counselling organization or a financial advisor. In the UK you can use free debt counselling services such as the Consumer Credit Counselling, the National Debtline and the Citizens Advice Bureau. Similar services are available in the US.5. CONTACTING YOUR CREDITORSA creditor is a company or person to whom you owe money. Many people struggling financially ignore debts and fear contacting their creditors.
This reaction will damage your credit record. Creditors or lenders may take action against you in an effort to get payment. If you're finding it hard to get your bills paid, be the one to contact creditors. They will be more willing to work with you. Work out arrangements that satisfy you both.
Explain to each lender that you aim to repay each debt in full over time, but that they must accept reduced repayments for now. Decide how much you can pay them each month and set up a debt repayment plan. ConclusionIf you're serious about reducing your debt you should stop spending on your credit cards and stop taking out new loans. To increase your income, consider finding a second job or a lodger. Claim every state benefit that you qualify for and work on cutting down your expenses.
Sell stuff that you don't need on eBay or at Car Boot fairs. Put enough money aside for emergencies, but use the bulk of your savings to pay off debt. Debts usually cost you far more in interest than you gain on your savings. Also, if you have a fairly good credit record, you should transfer your debts to cheaper lenders. Finally, shop around for better deals for services and products that you use.Disclaimer: This article does not constitute financial advice.
If you require such advice, you should seek appropriate professional guidance..
Copyright ? 2005. Chileshe Mwape writes for Debt Consolidation Loans UK: http://www.best-debt-consolidation-loan.co.uk/. Visit our site to consolidate debts and apply for a loan online. This article may be reprinted as long as all the above links are active and clickable.Credit Cards - Free Money for your Business (short term)
This money generating method was recently passed on to me by a member of my mailing list, it is important to stress that this method involves the use of credit cards and takes advantage of the options that they offer you. It is no way illegal and I am not recommending that everyone uses this method but if used correctly it can generate a short term source of income to help your business.What usually happens is that the 0% card is used to transfer the debt from your credit card that is charging you interest so that the payments you make pay off more of the debt on the new credit card as the interest rate is 0% for so many months. What you should be looking for is a credit card that offers the facility to balance transfer money into your bank account instead of just being able to pay off another credit card. The benefit being that you can then pay off other, non credit card related, debts. This process is going to be referred to as Adaptable Balance Transfers (ABT's), my terminolgy not...
Credit Cards - Free Money for your Business (short term)
Debt consolidation > Credit Cards - Free Money for your Business (short term)
NextStudent Jumps to No. 15 on Top 100 Consolidating Lenders List
(ContentDesk) November 12, 2005 -- The company moved up the list a total of 46 spots from its No. 61 position in fiscal year 2002. The Top 100 Consolidating Lenders is released yearly by the Department of Education. The list can be found at http://www.fp.ed.gov/PORTALSWebApp/fp/pubs.jsp."The company continues to grow, and we hope to do more loan volume next year and to help more students consolidate," said Don Fenstermaker, chief executive officer at Phoenix-based NextStudent.The company daily generates more loans due to better customer service, more benefits to borrowers, and new technologies that make the student loan process easier for students."It has been amazing to see and be a part of the strides that NextStudent has taken over the last year to get where we are today," said Jason Benedict, director of sales.NextStudent started as a scholarship search engine in 1991. In 2001 the company evolved into a...
NextStudent Jumps to No. 15 on Top 100 Consolidating Lenders List
Debt consolidation > NextStudent Jumps to No. 15 on Top 100 Consolidating Lenders List
Stop Debt Collectors Cold and get Back on Your Financial Feet
As a consumer law attorney who counsels people with debt problems, I've heard my share of horror stories about debtcollectors. For example, a college student client was threatened that she'd be arrested if she did not pay a credit card debt, and another client was called 12 times in one day at work about a debt that was 14 years old. If they knew their rights, these people could have avoided the emotional stress they experienced at the hands of aggressive debt collectors. This article provides you with an overview of those rights so you don't have to suffer like my clients did. You don't have to put up with abuse from debt collectors! Despite what they may tell you, debt collectors cannot put you in jail, make you lose your job, or ruin your credit forever if you don't pay a debt.
The federal Fair Debt Collection Practices Act (FDCPA) sets very strict limits on what debt collectors can and cannot do. Those limits include when they can call you, what they can say and what they...
Stop Debt Collectors Cold and get Back on Your Financial Feet
Debt consolidation > Stop Debt Collectors Cold and get Back on Your Financial Feet
Public Memorial Caps The End of XVI International AIDS Conference (AIDS 2006)
Toronto, ON (ContentDesk) July 27, 2006 -- The International AIDS Vigil, a public memorial to those who have lost their lives to HIV/AIDS, will take place Thursday, August 17, 9 PM, rain or shine, at Yonge-Dundas Square in Toronto, Canada. The event, a project of the 519 Church Street Community Centre, brings to an end the week-long activities of the XVI International AIDS Conference (AIDS 2006)."We believe this is a unique opportunity for the local community to join together with conference...
Debt consolidation hearing aids Public Memorial Caps The End of XVI International AIDS Conference (AIDS 2006)
Debt consolidation > Public Memorial Caps The End of XVI International AIDS Conference (AIDS 2006)
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