Since not many of us have enough financial resources to meet all of our requirements, we take loans to cover our expenses. And after getting the loans, it is easy for some of us to be lured into using the money without restraint; easy, but definitely not clever. Since you have fallen into the same trap, you can use debt management. Below are some steps that can be taken to achieve this:
1.Debt Management Programs.
Depending upon the gravity of your situation, you can seek the service of various Debt Management Help programs.
Debt consolidation loan- a loan that pays off all existing debts at a lower interest by merging them into a single one. It is used when you have a total debt crossing £5000 and owe to two or more creditors
Debt negotiation- a scheme through which your total debt amount can be reduced considerably, sometimes by half. You can take its help when you cannot even manage to make the minimum repayments.
Debt elimination- suggested when bankruptcy is the only alternative you have. Interest rates are reduced on all debts except one which can be paid off with the extra money saved from the other reduced payments
2.Reducing the number of creditors.
For example, you can use a single credit card instead of using two or more.
3.Not keeping too many bank accounts.
It is easy to lose track of how much you are spending and also how much you have when you have multiple bank accounts. The thing is, only two accounts are really necessary- a checking account and a savings account. If there are any unused accounts, close them.
4.Maintain a proper budget.
Make a list of all necessary monthly expenditure and cut down on extravagant expenses. You don’t have to buy what you don’t need, especially when you owe other people money.
5.Pay off more if you can afford it.
In the event that you get hold of more financial resources than usual, try to find out whether you can pay more than your usual installment. This will serve you better than spending it on some fancy clothes or gadgets.
6.Avoid taking on new credit.
After you have paid of all your debts, if the feeling that you can pull it off again happens, say a firm no to yourself. Loans should be taken only when absolutely necessary. Besides, too many credits make your credit report look bad.
Debt management can get you out of the labyrinth of debts you have got lost in- but it can only help you so far. To stay out of debt in future, you have to take the initiative of changing your spending habits and start economizing.