Debts in an individual’s life can be a source of stress, trauma and unhappiness. When you have that itchy feeling in your mind that you have to pay off a certain guy or a bank in a limited time frame, making proper decisions would seem like an 800m hurdle.
Paying off your debt requires a lot of persistence and sometimes individuals end up losing valuable assets like cars or houses due to failure in timely payment of money that was borrowed.
Here is a list of four creative ways to pay off your debt.
1: Reduce Interest Rates
Before you go ahead and start paying off debts chronologically or alphabetically, pay close attention to the list of credits you have. If you have a high interest on a certain loan, consider transferring it to another bank with lower interest rates. Most banks would reduce the interest value for better business relations. This way you can balance out your debts into various banks and pay a lot lesser than you actually hoped to pay.
2: Pay More
Most loans that are issued for certain tenure ask for a monthly repayment of a certain amount over a year or more. Consider paying more than the minimum value. If you have a little more cash at hand on a certain month, don’t blow it off in shopping or buying a Jacuzzi. Pay more than the desired minimum limit. This way you will be able to pay off your debts at a much faster rate. So if your general payment is $100 per month, pay maybe $200 or even $300 if possible.
3: Borrow from Your Life Insurance
Most of you out there have a Life Insurance Policy set up by yourself or your forefathers. This is your own money and so it wouldn’t be as much stressful borrowing money from yourself. If you have good Policies, borrow a percentage or the whole amount to pay off the immediate debts clouding over your head. Then with due course you can refill your LIC when you have extra cash in hand.
4: Handling Money
When it comes to monetary matters, you have to be very careful if you have debts on your shoulders. First and foremost, stop taking any further loans or credits. Freeze your credit cards if necessary. Then rank the debts according to interest rates and start paying them off from highest to lowest. Reduce on your daily bread expenses until your debts are repaid in full.
Keeping all these aspects in mind will help you pay off your debts at a much faster and more effective way.