Debt has a huge emotional and financial impact on your financial life. Debt can help you build a good career and a new home if it is used in a good way. Debt can help to set up a business and give jobs to millions of unemployed youth in the country. It has a good purpose. However, like two sides of a coin, debt has a bad side also.
Credit card debts, personal loans, and payday loans can be bad. The shine of the new purchase fades away before you make the credit card payments. The interest rate on a payday loan is so high that it’s practically impossible to pay it off with your next paycheck. The interest rate on a personal loan is also quite high. You take out a personal loan, get married, and continue to pay the interest on the loan for the next 2 years or more.
The worst part of being in debt is that it traps you into a vicious cycle of debt long after the things have already been consumed.
If you’re really interested in getting out of debt, then here’s a complete guide to pay back your creditors.
Many people look at credit cards as a tool to buy whatever they want. It is like a magic wand that helps them to buy the unaffordable things. But they don’t look at the future consequence.
When someone buys anything on credit, he is paying 20% more simply by paying the minimum off.
Credit cards are good when people pay the full balance at the end of the billing cycle. But most people don’t.
If you wish to get rid of debt, then use cash for shopping purposes. This is the first step to getting out of debt. When you use cash for shopping, you can avoid the high-interest on credit cards and also stick to your budget.
Do you know how long it would take to be debt free? How many months or years? How much will you pay in total? What if you pay less? Use a debt payoff calculator to know when you can be debt free. OVLG’s debt payoff calculator can help you know how much to pay for your debts and the amount you can save in the process.
One you can get an idea of the day you’ll get debt free, start working hard for paying off debts.
Choose a good get out of debt program to pay back your creditors fast.Debt settlement can help you get out of debt in between 2 and 4 years. In this program, your payoff amount is reduced and penalties are waived off. Debt consolidation can help you get rid of debt in between 2 and 5 years. Here, the debt consultants combine your multiple bills into an affordable single monthly payment plan. Debt management helps to lower your interest rates and monthly payments. The expected time to get rid of credit card debt is between 2 and 5 years.
What is your financial goal? Do you want to save on the interest or the outstanding balance? Think about it and then choose a program.
Stop spending money on items that don’t matter in your life. Remember, your immense desire for wearing the branded clothes, eating foods at top-notch restaurants are keeping you in debt. Stop wasting money and make it your mission to save where you can. Lead a frugal life till your debts are gone. Thereafter, you can splurge occasionally.
When you default on a credit card, it may go into collections. You may start getting calls from a debt collection agency within 90 days of defaulting on the debt. But not all the collection agencies follow the FDCPA laws. Know what are your rights and deal with the collectors tactfully when you’re trying to get out of debt. Always ask the collection agency to validate the debt before you pay a penny. If they can’t validate, you can always send a Cease and Desist letter to the collection agency.
If a debt collection agency harasses you, contact us. Our attorneys will help you file a lawsuit against the collection agency and get a cash reward.
If you have savings, then use a portion of it to get out of debt. The compounding interest on the credit card is increasing your debt load. Set aside a small amount for covering your emergency expenses. Use rest of the money for getting out of debt.
Believe me, when I tell you that it feels great when you get out of debt. I was in debt after finishing my higher studies. But after I paid off my debt, I felt free. I felt as if a huge load has dropped from my shoulder. It feels great.