4 Tips to Organise Your Debt in 2020
Have you decided to make a new start this year? There’s never been a better time to organise your debt than right now. Make 2020 the year that you get your debt under control and get yourself back on track financially.
Loans for People with Bad Credit can help you to make positive changes in 2020. We have years of experience working with people with bad credit to help find the right solutions – from bad credit car loans to personal loans. Sometimes you simply need that helping hand to help organise your debt and get yourself on a better financial path.
There are lots of ways you can go about organising your debt but finding a strategy that works for you is vital to ensure that you’re successful in 2020. You may choose a bad credit car loan, or you may choose to pay off all your outstanding debts first.
Whatever your approach, have a look at these top tips to help organise your debt:
Always try to pay more than the minimum
If you have credit cards, overdrafts or other lines of credit, you should take a look at how you can pay off as much as possible.
Paying only the minimum payments means that it can take a long time to pay off loans such as bad credit car loans – so think about whether you can increase your payments slightly each month. Even as little as $20-$50 extra each month can make a huge difference when it comes to paying off your loans so try to budget for this if you can.
It’s really important however that you don’t stretch yourself too far financially – you don’t want to risk not being able to meet other payments or expenses that you may have. If you’re unsure of how much extra you can feasibly set aside to organise your debts, why not try using a financial calculator to help you?
Review your debts and prioritise repayments
Organising your debts means figuring out where you’re spending the most money and trying to save yourself from getting into more debt as quickly as possible. You want to get yourself back on track with your finances – so it’s useful to review where you’re spending the most money and how you can reduce this as effectively as possible.
Paying off your most expensive debts first can be a good option if you’ve got multiple debts or outstanding credit card bills. Your most expensive debt is likely to be the one that is charging you the most interest. Once you’ve paid off this debt, you can move to your next most expensive debt until you are left with your least expensive (with the least interest being charged) to pay off.
Never take this approach at the expense of missing other repayments or defaulting on other loans – you must always aim to make all your required repayments, even if it’s just the minimum required.
Track your spending
This might seem simple but too many people simply forget to, or don’t consider doing, this easy and often revealing task. It requires you to step back and look at where you are spending and to identify any areas where you may be able to cut back.
Write down all the expenses that you have – this should include everything from bad credit car loans to essential monthly outgoings such as utility bills and food costs. Many people find it surprising when they write everything down – and realise that they’re actually spending far more than they thought they were. You can also identify the areas where they are happening and consider why costs are higher here and how you can cut down.
Any money that you save (from areas you’ve identified as unnecessarily high on spending) you can put aside to pay down your debts and make 2020 the year that you organize your debt once and for all.
Consider a consolidation loan
Having multiple loans to pay off can get really confusing – you’ve got to remember different payment dates and amounts each month, there’s a lot that can go wrong. To get organized and make things easier for yourself, you may want to consider consolidating all your loans into one.
With a consolidation loan, you’ll combine all your consumer debts into one loan which requires one payment. You may also be able to get a lower interest rate meaning that overall your repayments are not only simpler and more streamlined but also less.
Consolidation loans will only work if you’re organized. You need to budget properly, taking the time to go through your loans before consolidating them together. Once you have a consolidation loan, you need to take care of your spending so that you can always rest assured you’ll make your repayments each month.
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