Nowadays, lending is easy. You can apply for a loan within ten minutes. There are options if you need nothing but a passport. For money you can buy anything: car, home appliances, apartment. But what if the situation got out of control at some point and found yourself on the verge of bankruptcy? How to get out of a credit hole? Here are some practical tips. flowersnflorists.com has more details
Credit card holders often make a mistake. Banks often provide the possibility to use a credit line provided that only interest is paid. This is the minimum payment. Such a system seems to be very suitable. This can be accepted, but it is convenient only for the bank and not for you. If you only make minimum payments per month, then the question of getting rid of credit debt will never stop paying for you. Experts have calculated that a person who takes, for example, 300,000 dollars with 18 percent per year and makes a minimum payment each month will have to repay the debt within 26 years, while eventually repaying an amount that is almost twice the original amount. Would you like a puzzle in the future to get out of a credit hole? Then immediately try to allocate as much money as possible to repay the loan. If the minimum payment is five thousand dollars, pay ten in general, as much as possible, but most importantly – more than what the bank requires.
Small and large debts
If the mistake has already been made and oversold the credit hole, do not conduct new supervision. So many borrowers who find themselves in a difficult situation, first decide to pay small debts, and then think about large. The logic is clear: first, it is difficult for a person to keep information on all loans, especially if there are many, and even wants to get at least some, and second, it is psychologically easier for many to have one big loan than a lot of small ones. However, such justification is fundamentally incorrect! In order not to forget any obligation, you can transfer information to your computer. Now there are many special programs for accounting finance. Get an ebook and it will be easier for you to manage not only debt but also money in principle. Remember: it is preferable to repay large loans first, those that are taken at the highest interest rates and mean the largest overpayments. But if interest rates are the same for all loans, then it is really better to deal with small debts first – this will be a good incentive for further repayment of large loans.
Many see the way out of the hassle of raising the credit limit. Let’s just say: this is not an option at all! So you will only delay time, relax, but do not change the situation for the better, but only make it worse. Increasing the limit will lead to an increase in the loan period and the mandatory monthly amount to maturity.
Some borrowers are looking for ways to get out of a credit hole, go to the bank and ask for a combination of several debts into one big loan to increase the repayment period and reduce the monthly payment. This approach is, in principle, proportionate. But there’s a problem. Such a program was debugged in Western Europe, but we can only refinance loans, ie, get a new loan to repay the old, while there are no preferences and discounts. However, the main thing is that the refinancing process involves paying various fees and commissions, so efforts may ultimately be unnecessary and the amount of debt will only increase. Such a solution can only prove beneficial for long-term loans, such as mortgages, and only if you have taken out a loan at very high interest rates.
Now we go straight to the story of getting rid of credit debt. The first and most important thing is to ensure creditors’ trust. You will not be able to avoid payment in any way. Therefore, do not hide from the banks and individuals you owe. Sincerely tell your difficulties, make sure you do not avoid obligations. You may meet and be able to find a way out of a difficult situation.
Order in finance
If you own a multi-debt, then you do not know how to keep records of personal money, and you are in complete disarray on financial matters. Start with cost and revenue control. Record your expenses every day so you know exactly what money is spent on. Try to keep such accounts for at least a month and then analyze your financial situation. Pay close attention to costs, perhaps any of them can be avoided and thus saved. Then, create a budget for the coming month. Include all possible earnings and planned expenditures (based on your first month accounting data). No matter how hard it is, stick to your budget and spend more than planned. So you can clean up your finances and maybe find a way to get out of the credit hole.
Increase in revenue
Pay your debts when you already live payday payouts is obviously difficult. Where to find additional resources in this case? Perhaps it makes sense to take on more duties at the main workplace, of course, at an additional cost. If this is not possible, it would be appropriate to find a side job. You can surely increase your income by properly organizing your working hours.
The idea of new loans between borrowers causes vibration and confusion. How to get out of a credit hole if you borrow more and more? In fact, this option can be a very wise decision. Loans should only be from people who do not require much interest from you. Do not hesitate to contact relatives and friends by saying, “Help me out of the credit hole!” People you are dear to certainly help if you can. In addition, they will not require you to return the money in due time, so you will not have a precise framework for paying off your debts. However, it is not worth undermining the confidence of loved ones. Please return your borrowed funds as soon as possible.
The hero of the famous Soviet cartoon, Uncle Fedor said, “To sell something unnecessary, you must first buy something unnecessary …”. We cannot disagree with this statement. But you can sell what seems at first glance necessary. For example, TV, especially if you have a plasma and expensive. You can not only earn extra money, but also free up the time used to watch TV shows and movies for something more useful, such as thinking about getting out of a debt hole. Maybe it makes sense to leave the car during the crisis. You won’t spend money on maintenance, repairs, fuel, etc. And you can save money on repaying loans.
Now that you know how to get a credit pit, act! And when the financial nightmare remains, forget the loans forever! First it is better to save and then buy. And yet, if you desperately need money and decide to borrow again, remember the limit: loans should not exceed 15 percent of annual income.
Before borrowing, carefully study all bank conditions, the size of possible commissions, payment terms, etc. Calculate how much the loan will actually cost you, think about whether you are able to repay and whether your family budget can withstand such a burden. Be financially literate! Good luck