Paying of accumulated debt can be a daunting task and apparently it seems to be really frustrating to cut short regular budget for making provision for repayment of the loan. However paying the debt is a real obligation and we all need to save money for paying loan, regardless it is a secured loan or an unsecured one.
The good news is paying off debt in a limited budget is challenging no doubt, but it is not impossible. Rather the habit of savings and managing expense on tight rope can lead to a healthy habit of saving money when your debt will be reimbursed.
1. Consolidate All Your Debts
May be you have multiple debts in secured and unsecured category. You can speak to your personal banker for sanctioning of a personal loan, where you can pay off all unsecured loans at one go. You will save the interest money you were paying and all your debts will be accumulated under one account. You can arrange EMI option for paying the money or next 5-7 years at your convenience.
2. Stop Using Your Credit Card
Stop using your credit card for shopping and other expenses. You may put some restrictions on your habit of shopping frequently or dining outside. This will restrict your budget as well as it will provide you a control on the outstanding bill amount of your credit card. In order to stop using your credit card you can use these steps:
- Stop all ECS instructions from credit card,
- Stop all auto renewal instructions on membership using your credit card,
- Stop stand-by instruction of subscription renewal using the credit card.
3. Take Loan From Your Life Insurance Policies
Life insurance cash bonds are meant for emergency but payoff the debt is a real-life crisis. You can borrow some cash from life insurance cash bonds. Yes you will get some loan outstanding here, but rate of interest is really less here in comparison to credit card interest rate or unsecured loan’s rate of interest. You can pay off your unsecured loan with this money and save the interest you are paying every month.
4. Pay More Than Minimum Amount On Your Credit Card
You have already stopped spending on credit card and your credit card outstanding is fixed now. Start paying more than the minimum amount to pay off faster credit card bill. Now you may raise a question how you will pay the bigger amount. You have already paid your unsecured loans and you are saving the interest. Use this saved money for paying off your credit card outstanding. Faster you pay, you will save more the money levied as interest.
You can negotiate lower rate of interest from your credit card issuing bank/authority. If your credit score is good, you may get the privilege of lower rate of interest and that will be convenient for you.
5. Sell Everything You Do Not Need
Take a meticulous survey of your assets and decide which you really need and which are not used in your regular need. Dispose all the surplus gadgets and furniture and it will help you to unclutter your inventory. You will get some immediate cash out of this clearance sale, which will help you to clear your debt to some extent.
These are 5 really handy ways for your bad debt management. Try the ways and soon you will find yourself worry free of the looming debt. If you can continue with your budget control lifestyle, you will start saving fat next so you will never face the topsy-turvy of debt in your days ahead.