5 simple and effective ways to get out of debt fast
Rising disposable incomes, rampant aspirations, and convenience in availing credit have increased the amount of debt an average individual carries. In such a scenario, debt management has become imperative.
By joining a debt management program you can manage your finances better. (Image: Freepik)
Managing debt is one of the integral parts of personal finance. Managing your debt means reshuffling and seeing what you should do to pay back the debts. This also means choosing the best loan option whenever one needs to borrow.
By joining a debt management program you can manage your finances better. Efficient management of the debt can save a lot of money in your lifetime and can also help in accumulating your wealth over a period of time.
How to get rid of your debt faster:
# Maximize earnings, minimize expenses
You should always aim at maximizing your earnings and minimizing your expenses. This is the most effective way of staying clear of any new debt and getting rid of the current debt fast.
# Refinancing
If you have, willingly or unwillingly, accumulated a large amount of debt and are unable to clear it, then debt consolidation or refinancing your debt to a cheaper deal is one of the most effective ways of freeing money up and making loans more palatable. The simplest way to make debt cheaper is refinance, i.e. to find a better deal where interest rates are less than the ones you are currently paying.
The beauty of refinancing is that it can be applied in a wide variety of ways. In other words, you are not necessarily exchanging one deal for another across the range of debts that you have: it may also be possible to consolidate debts into one single loan.
# Prioritise your dues
Another way to mange your debt efficiently is to prioritise your dues and begin clearing them. You should know the costliest loan you have taken and this is the one you should clear first.
# Stay away from additional debt
Staying away from taking additional loan or not accumulating more credit card or any other debt is another effective way to pay off your existing debt fast.
# Speed up payments
Speeding up your payments or paying more than the minimum amount due is also an effective way to clear your debt fast.
Remember, debt is easy to slip into and hard to get out of. Avoid accumulating more debt. If you find yourself cash-strapped and require some money urgently, then consult your financial planner before considering a loan.
