With the stabilizing economic situation people tend to accumulate more debts. The financial crisis changed this situation for some period, but the recovery of credit companies has already started. However people still have no clear understanding of right ways for covering the debts according to the financial statistic.
By the recent calculations the total debt of citizens is more than $11.8 trillion. And this number is just growing. The other problem is that people can be scared by such number and they may panic provoking even more financial problems.
Some people choose to use money saved for the retirement. The others try to solve their financial issues with payday loan which can only help for some short period of time. And one another bad financial solution is to cover one debt, while the other one brings higher interest rates and additional charges.
So there is a great necessity to create some useful tips to help people get out of debts and make their finance stable and healthy. Here they are:
Prioritize Your Debts According to Interest Rates
For some people it is really useful to cover the debt with the highest interest rate and pay only the minimum percent towards the others debts. However such step should be based on calculations and you need to be sure that you will avoid extra charges for missing the other payments.
So be careful with prioritizing your debts, contact your lenders and try to make some agreement to avoid additional charges.
Consider Repaying your Debt like a Diet
This means that the process of covering the debts is your financial diet, and you need to have an appropriate attitude to your plan. Consider making a budget, controlling your income and expenses and also planning all serious purchases.
The other important step on the repaying way is that you should reward your work. Make some pleasant, but not expensive, things like buying a book or going to a water pool. Also try to be realistic creating your debt recovery plan, take into consideration your possibilities and real numbers of your financial state.
Make All the Payments on Time
This is very important obligation that you must avoid any missing of due dates of necessary repayments. You can use different reminders or even set automatic payments. But be careful with available applications and consider all terms that you have.
Such responsible attitude to payments will help you to decrease your interest rates due to great credit history you are performing. You just need to understand that the attitude of lenders is much dependent on your solvency and credit score. So make all possible steps to improve them.
Know the Difference between Debt Management and Debt Settlement
Many people have lost a lot of money confusing those two companies. So make sure you understand the difference. As the first one is a non-profit organization created for counseling people with debts. While the second one demands high charges for its’ assistance.
And unfortunately such practice is a common problem of many consumers. As such settlement company can convince you not to pay to your lenders making different offers. But eventually you will be charged a great amount for money for missing real payments.
And the last recommendation is to be focused on the repayment process, motivate yourself and celebrate your achievements.