People don’t wake up one morning planning to owe all their lives realizing the consequences that come with owing. Circumstances beyond control push people into incurring debt. But if you find yourself caught in a debt cycle, you can still come out of it if you know what to do.
3 Ways to Punch Debt in the Face
In a situation whereby you have incurred debts with high interest rates, you really have to find a way to pay off these debts. The different plans to achieving this include:
#1. Debt Avalanche Strategy
This method involves creating a list of all your existing debts starting from the ones with the highest interest rate down to the lowest. After listing them, you make minimum payments on each and every one of them but you put extra money on the Debt with the highest interest rate.
When the Debt with the highest interest rate is cleared, you jump to the next debt with the highest rate. This process continues till all the debts are cleared.
#2. Payday Loan Consolidation
This involves getting a loan with a lower interest rate to swap those with Higher interest rate. There are many options to get this payday loan consolidation and the basic ones include: Payday Alternative Loan (PAL), Personal loan and 0% APR Credit Card offer.
#3. Payday Loan Relief Without Debt Consolidation
While many consider Payday Loan Consolidation, others who do not like the idea of repaying debt with more debt prefer Payday Loan Relief method. This is because there is no debt consolidation attached.
The strategies involved in this plan include: Consultation about debt management, asking for an extended payment plan from lenders and borrowing from friends and families.
How to Avoid Being in Debt
Debt has a way of eating deeper and faster into the lives of many before realization sets in, especially debts like payday loans with high interest rates.
To avoid being in this debt cycle, here are some helpful tips to consider:
- Creating a Budget: As boring as this might sound, creating a budget goes a long way to helping people not to get into debt traps. Listing all your incomes and expenses help you keep track of your spending and cut back little where necessary.
- Increasing your income: Aside from creating a budget and cutting down on unnecessary expenses, there is an alternative to increasing your income. Here are some ways you can increase your income: Starting a Blog, Offering Web Design services, Taking online surveys, Online Tutoring, Virtual Data Entry Assistance, Offering freelance writing services on different platform like Upwork, Fiverr, etc.
- Investing: Investing smartly and consulting the right experts in the field helps generate more money when needed and prevents one from being in a debt cycle.
Conclusion
It is always advisable to avoid putting yourself in Debt. Being in debt comes with so many consequences and many go through a whole lot before clearing off these debts.
Therefore, it is better to take the proper avoidable steps in order not to find yourself in the debt trap.
