Tips on how to get out of Debt

May 22, 2012   ·   0 Comments

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http://stockssavvy.comEven before the coins were invented, debt existed because the archaic trade involved a promised credit for the already handed goods. From thereon, debt has become quite prevalent and ubiquitous.

Effects of debt

Although debt leverages your financial asset allowing you to buy or do things that you could not perform with your income, it comes with substantial risks. And excess of debt accumulation can cause not only personal problems like bankruptcy but also financial outcry.

At household level it can cause family stress, feeling of insecurity, unemployment, financial hardships, work accidents, stigma, poor physical and mental health, etc.

 

Getting out of debts

It is predicted that the world is going to drown soon in debt if millions of people continue their over-spending habits. Few pointers that is a lifeguard for sinkers in the debt sea:

  • Understand your financial structure before you venture income on expenditure. This is the root solution to your debt problems
  • Halt adding burden to your debt. Enough your credit card usage if you have hit the threshold point. Do not take any more loans, whether it is credit card or payday cash
  • Tabulate your expenses irrespective of its price, and categorize the basic needs from luxuries. In other words, a “want” is different from “needs” and cut back those expenditures that you feel could help save clear that debt.

Consider a visit to a debt counselor and take an advice for confining all your debts into one with a low interest rate. Multiple debts can cause confusion on repayment, so keep a track of debt lenders, organizations, etc.

If you are paying premiums to the insurance availed, record those amount and try to trim the number of insurances and choose only those that help in need. Insurances like PPI are useful if you are redundant or experience job loss. But be cautious of a mis-sold PPI claim, you may have to reclaim PPI in such a case.

Approach your lender and explain your financial crisis. It is even better if you could send a mail or a post a letter to acknowledge your effort in trying to repay the loan. This will help in case the financial institute decides to sue you for your increased debts.

Toss those high-interest paying credit cards, insurance plans once you have repaid the debts. It might take a while till you are debt-free but it is worth the effort to have a clean start.

About Author: Neo Zack is a Tech writer from London with an interest in topics relating to Insurance, Finance, and green living. You can follow him @financeport on Twitter.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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