How do you paying off debt?
Paying off debt has become a major concern for people in every section of the society, rich and poor. Taking a loan/credit is much easier but to pay it off is very difficult, especially if you keep delaying the repayment. Non-payment of loan/credit can lead to many problems, such as bad credit score, annoying collection calls, and the worst could be bankruptcy. So, to avoid such consequences, paying off your debt fast is the only solution. Debt can be paid off in 2 ways, by taking help of a debt relief company, or by handling debt yourself.
How to pay off debt yourself
When you decide to take full responsibility of your debt and pay it off soon, you need to be aware of many details. Knowing the details can help you negotiate with the creditors more efficiently and thus get better deal from them. While paying off debt yourself, you need to follow a procedure to reach your goal. Given below are the steps to follow while handling debt yourself.
- Make a list of your debts – Before you start any negotiation with creditors, make a list of all your debts according to the interest rate payable on them. This will help you get a proper idea of what you have to handle.
- Prepare a budget – When you make a budget, you’ll know how much money you take in and how much you spend. This will help you in meeting necessary expenses like housing, food, health care, and education; and also repay your loan at the same time.
- Contacting your creditor – The next step is to call the creditor and fix an appointment. Tell him that it is difficult for you to pay off the debt and you need some help from him in repaying it.
- Get a better interest rate – While negotiating with the creditors, the first thing to ask for would be a lower interest rate. This can be done by telling him that other creditors are giving you a better deal and thus you’re paying them off and cannot pay him for the high rate of interest.
- Ask for other deductions – Along with a lower interest rate you can also negotiate for a suspended monthly payment and removal of extra fees like late fees, finance charges and over-the-limit fees.
- Try for debt settlement – If you think that settling the debt is a better option for you, then negotiate with your creditor regarding this. Ask him to waive off a particular percentage of your total loan amount and accept a lump sum amount as the final payment. This will help you get rid of your debt much faster.
Paying off your debt yourself can help you in saving a lot of money that you would have paid to a debt relief company. It also protects you from scams as you’re not relying on any third party. But if you’re not confident enough about handling it yourself, or if your debt is very high, then taking professional help can be a better option.