Several factors can cause us to find ourselves in debt: illness, emergencies, unexpected job loss, and more.
Debt can cause stress and anxiety and negatively impact your overall health. If you find yourself burdened by excessive debt, it’s never too late to start taking steps to pay your debts and get back to good financial standing.
Here are five methods for how to pay off debt and how to stay debt-free:
Know how much you owe
Before you can start tackling debt management, you need to know its full extent. Determine how much debt you have in all its forms and calculate the grand total. The rule of thumb is that you should start paying off the bills with the highest interest rate first.
Create a budget, track, and reduce spending
Sometimes debt is a result of mindless overspending. Create a budget and keep an eye on your spending to get on track towards good credit. Get a clear idea of how much money you need to pay bills and how much you have leftover for savings and entertainment. Set a limit and reduce your spending to stay within it.
Pay more than the minimum installment.
If you only make the minimum credit payments each month, it will take years to pay off your debt. Whenever possible, make extra payments to start reducing your debt. It will save you money in the long run, as you will pay less interest on your debt.
Debt consolidation
If you owe money in the forms of many different debt payments, you might benefit from debt consolidation. This approach allows you to make one low-interest payment a month for all your debts. It can also help you pay your debt off quicker if you make more than the minimum payments.
Negotiate your debt
If you find yourself stuck with debt you cannot manage, approach your creditor to see if they can work with you.
Sometimes they will reduce the amount owing or help you create a payment plan that is easier to manage.
You can access an online instant and payday loans even with a low credit score with iCASH. Visit icash.ca to get started.