Did you know half the population is likely to spend more money than their actual income? Without a second income source, the only option left is to apply for a loan—as is the case for people all over the world. Unlike others who find the thought of owing a significant debt too frightening, they use credit to fulfill their requirements when their income proves insufficient.
But sometimes the thing that you least expect happens. And that’s when knocking on the door of lenders becomes one’s only option, in the case of a sudden job loss, chronic ailment which needs immediate treatment, or sudden home repair requirement. But when it comes to paying off the debt, homeowners find themselves stuck with seemingly no way out. Borrowers often have to spend a certain portion of their income in clearing debt along with interest. So, are you stuck with your debt too? Let’s read the best debt consolidation tips that can help you become debt-free pronto.
- Pay more every month
The easiest possible way to clear off your debt at the earliest possible time is to plan a maximum monthly payment. No matter what type of loan or credit you have borrowed, you must pay more in order to get your debts cleared faster. Do you know that the more you put off your loan, the higher the interest you end up having to pay? Hence, you must start paying more each month and get this burden off your shoulders as soon as possible.
- Use the snowball method
Sometimes, it’s not just one type of loan that you have borrowed. In fact, you owe a different loan amount to different lenders. If that’s the case, it becomes difficult for the borrower to clear all their debts on time. This is because you don’t know which loan you must clear first and which can benefit you in the long run. If you want to pay more every month, try the snowball method.
Basically, you have to list all types of small and large loans you owe. Then, you must use all your excess income to clear the smallest loan first and then throw your income at the large loans. This will clear your smaller debts and save you a considerable amount of money to go towards resolving the large debts.
- Have a side business
While the snowball method can free you from debts sooner, it is important to look for some side jobs so that you save up a sufficient amount of funds to make repayments. Everyone has some unique talent which they can monetize. You can get a virtual assistant job or become a babysitter. Anything that can make you extra money can help reduce your debt burden. You can even join some online freelancing sites to get high-paying and convenient jobs.
- Sell unused items
We have a lot of stuff that we hardly use. Why not consider selling this stuff or pawning them off to make some quick money? You can sell the unnecessary item through a consignment shop.
Lastly, you could also opt to go to approved debt consolidation companies in Singapore to consolidate your multiple loans into one loan and ease the repayment process.