Record numbers of people are struggling under the burden of heavy debt, and when things start to get
Record numbers of people are struggling under the burden of heavy debt, and when things start to get unmanagable it's easy to try and ignore the situation in the vain hope that the problem will go away. Of course, we all know deep down that our debt situation has to be tackled, however stre ful and scary the pro ect might be. So how can you go about facing up to your debts?
The first thing to do is take a long look at your financial situation. How much money can you afford to devote to repaying debt? Are there any ways to increase your income? Are there any ways to reduce your expe es? By drawing up a se ible and honest budget plan you'll at least know the true extent of your problems, and you'll be taking the first step to getting back in control.
Next, you need to look at your repayments and expe es, and identify which are the most important. Your mortgage or rent should always be your number one priority, closely followed by e ential bills such as electricity and water.
Make sure your budget plan will cover these e entials first, then add in the costs of daily nece ities such as food. After you've done this you should have a figure for the total cost of your most important expe es. Subtracting this figure from your total income will give you the amount you now have to devote to reducing your debt.
It's vital to cover the minimum repayments on as many debts as po ible, as charges for late payments or mi ed payments will only push you deeper into the red. If you find that you don't have enough are funds to make all your minimums, then contact your creditors and politely explain that you're experiencing financial difficulties and need help. This step can be daunting, but remember that the person you eak to will only be an employee of a company and won't take the situation personally.
Most creditors will be ha y to come to some arrangement with you to reduce your monthly payments, either by restructuring your debt over a longer repayment term, or switching to interest-only repayments for a while.
If after trying to renegotiate your debt you find you still can't make ends meet, it could be time to reco ider a co olidation loan. Debt co olidation works by taking out a single large loan to pay off all your smaller, more expe ive debts such as credit cards and the like. By getting a loan with a lower interest rate and reading your repayments over a longer term, you can reduce your monthly bills quite su tantially.
Unfortunately there are drawbacks to co olidation loa too. You'll be going deeper into debt with yet another loan, and will probably end up paying more in interest charges in the long term. You might also find it difficult to get a co olidation loan unle you own your own home or have other a ets to secure the loan with, and homeowners will risk losing their home in the future if they can't keep up the repayments. For these reaso it's best to think carefully before choosing the co olidation option.
No matter whether you choose a co olidation loan or not, it's important to remember that debt affects huge numbers of people and it's nothing to be ashamed of. The only way out of your debt problems is to face up to them, and try to get back in control of your finances.
The first thing to do is take a long look at your financial situation. How much money can you afford to devote to repaying debt? Are there any ways to increase your income? Are there any ways to reduce your expe es? By drawing up a se ible and honest budget plan you'll at least know the true extent of your problems, and you'll be taking the first step to getting back in control.
Next, you need to look at your repayments and expe es, and identify which are the most important. Your mortgage or rent should always be your number one priority, closely followed by e ential bills such as electricity and water.
Make sure your budget plan will cover these e entials first, then add in the costs of daily nece ities such as food. After you've done this you should have a figure for the total cost of your most important expe es. Subtracting this figure from your total income will give you the amount you now have to devote to reducing your debt.
It's vital to cover the minimum repayments on as many debts as po ible, as charges for late payments or mi ed payments will only push you deeper into the red. If you find that you don't have enough are funds to make all your minimums, then contact your creditors and politely explain that you're experiencing financial difficulties and need help. This step can be daunting, but remember that the person you eak to will only be an employee of a company and won't take the situation personally.
Most creditors will be ha y to come to some arrangement with you to reduce your monthly payments, either by restructuring your debt over a longer repayment term, or switching to interest-only repayments for a while.
If after trying to renegotiate your debt you find you still can't make ends meet, it could be time to reco ider a co olidation loan. Debt co olidation works by taking out a single large loan to pay off all your smaller, more expe ive debts such as credit cards and the like. By getting a loan with a lower interest rate and reading your repayments over a longer term, you can reduce your monthly bills quite su tantially.
Unfortunately there are drawbacks to co olidation loa too. You'll be going deeper into debt with yet another loan, and will probably end up paying more in interest charges in the long term. You might also find it difficult to get a co olidation loan unle you own your own home or have other a ets to secure the loan with, and homeowners will risk losing their home in the future if they can't keep up the repayments. For these reaso it's best to think carefully before choosing the co olidation option.
No matter whether you choose a co olidation loan or not, it's important to remember that debt affects huge numbers of people and it's nothing to be ashamed of. The only way out of your debt problems is to face up to them, and try to get back in control of your finances.
