Many Canadians are facing a financial crisis. Debt has become crippling as people struggle to make even minimum payments. While staring in the face of bankruptcy you should know that there are other options available. You can create a debt settlement plan to pay off your loans and become debt free on your own.
Create a Plan
When facing a financial crisis it is best to start with a plan. You can conquer your stack of bills with a well constructed plan of action. To do this, begin by gathering everything about what you owe and any other bills you have each month. Create a budget so you know how much of your monthly income can be used to pay down your debt. Once you have created a budget, stick to it.
Now, take all of your debts and create some order out of the seeming chaos. Organize the bills in a way that allows you to note the balances due, interest rates, minimum payments, and contact information. You want to have one quick reference sheet that has all of this information easily accessible. Prioritize your bills by their interest rate. You want to pay off those loans with high interest rates first so your money can start working towards your principal instead of paying interest.
Settle Your Debts
After you've created a budget and gathered your information reach out to your creditors. You can attempt a debt settlement with them on your own. Call every company and let them know you are struggling with your payments. If you inform them that you are trying to avoid bankruptcy they may find an arrangement that is more manageable for you.
Debt settlements can range from reduced interest rates to reduced balances. Companies may also waive any annual fees that your account would otherwise incur. Every company is different and you may find some more willing to work with you than others. If you find yourself talking to a stubborn person try calling again and speaking to someone different. Sometimes it's just a matter of talking to the right person.
Even if they just reduce your interest rate that means more of your payment will be going to pay down your principal as opposed to the interest. That will pay off your debt sooner providing you some relief for a minimal effort.
Consolidate Your Debt
Once you have created a debt settlement plan you may even consider taking it a step further. Debt consolidation loans can give you a more manageable payment when you are paying down your loans.
Home equity loans are secured loans that can be used to pay off your current debts. These loans use the equity in your house as collateral, as the name implies. Since this is a secured loan the interest rates are lower and typically include other benefits. You can pay everything you owe from this loan so you are left with one payment on a single loan with a manageable interest rate.
If you don't own your home or do not have enough equity in your home there are other options available. Some banks offer debt consolidation loans that are unsecured, meaning they don't have collateral. Since these loans are unsecured they may have higher interest rates, but you still have the convenience of one manageable payment.
Create a Plan
When facing a financial crisis it is best to start with a plan. You can conquer your stack of bills with a well constructed plan of action. To do this, begin by gathering everything about what you owe and any other bills you have each month. Create a budget so you know how much of your monthly income can be used to pay down your debt. Once you have created a budget, stick to it.
Now, take all of your debts and create some order out of the seeming chaos. Organize the bills in a way that allows you to note the balances due, interest rates, minimum payments, and contact information. You want to have one quick reference sheet that has all of this information easily accessible. Prioritize your bills by their interest rate. You want to pay off those loans with high interest rates first so your money can start working towards your principal instead of paying interest.
Settle Your Debts
After you've created a budget and gathered your information reach out to your creditors. You can attempt a debt settlement with them on your own. Call every company and let them know you are struggling with your payments. If you inform them that you are trying to avoid bankruptcy they may find an arrangement that is more manageable for you.
Debt settlements can range from reduced interest rates to reduced balances. Companies may also waive any annual fees that your account would otherwise incur. Every company is different and you may find some more willing to work with you than others. If you find yourself talking to a stubborn person try calling again and speaking to someone different. Sometimes it's just a matter of talking to the right person.
Even if they just reduce your interest rate that means more of your payment will be going to pay down your principal as opposed to the interest. That will pay off your debt sooner providing you some relief for a minimal effort.
Consolidate Your Debt
Once you have created a debt settlement plan you may even consider taking it a step further. Debt consolidation loans can give you a more manageable payment when you are paying down your loans.
Home equity loans are secured loans that can be used to pay off your current debts. These loans use the equity in your house as collateral, as the name implies. Since this is a secured loan the interest rates are lower and typically include other benefits. You can pay everything you owe from this loan so you are left with one payment on a single loan with a manageable interest rate.
If you don't own your home or do not have enough equity in your home there are other options available. Some banks offer debt consolidation loans that are unsecured, meaning they don't have collateral. Since these loans are unsecured they may have higher interest rates, but you still have the convenience of one manageable payment.
1 comments:
I just love this article. The people who are overwhelmed with debt, most of the time depends on debt relief companies. They think these debt relief companies will help them to get out of debt problem by settling their debts. But they forget that debt settlement companies charge a heavy fee for reducing your debt burden. Most of the time debt reduction companies don't fulfill their promise. They just charge high fees without taking any initiative to cut down your debts. So don’t waste your money by hiring these debt relief companies. Try to settle your bills yourself. It will help you to save your wastage of money and minimizes your unnecessary expenses. By this way, you will be able to get out of debt soon.
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