When news came that learning institutions should be closed in...Read More
6 Ways to Get Out of Debt Faster
Have you found yourself taking a loan? Starts with a small amount, right? Then you need a bit more money and you need another loan. After sometime, you got a huge pile. You find your debt is out of control.
Despite what kind of debt you are in, without the right tactics, it can take you a long time to clear the debt.
Try these steps to ease your debt and get out of it as fast as you can.
- Pay more than the minimum amount:
Paying a higher amount than the minimum amount will speed off clearance of your loan and you can move on.
Lets’ assume you have a HELB loan. The minimum amount payable for is KES. 1,500/-. Why don’t you try to pay off an amount higher than the minimum payable? You can try by paying KES. 2,500/-. This will speed off the loan repayment process.
- Pay off the debt with the highest interest first:
Choose the debt that is charging you the highest interest and focus on it first. Once it is all cleared up, move to the next most expensive debt. Use the money that you had been allocating to the highest debt to pay this debt. This method will give you motivation as you can see progress.
Others prefer using the snowball method which advocates clearing the smallest debt first.
- Pick up a side hustle:
Earning some extra few coins will allow you have an extra amount of money that you can allocate to repayment of the highest debt. There are different side hustles which can bring in good money faster such as online writing, virtual assistants, mowing yards, cleaning houses amongst others.
- Track your spending and identify areas to cut back on:
You can never know how much you can save unless you give it a try. Track what you actually spend on and not what you think you should be spending on. Once you are aware of your spending habits, identify the areas you should cut back on. Bare in mind the old saying,” You can have almost anything you want; you just can’t afford everything you want.”
Identify your needs and wants. If you want anything, don’t buy it unless you actually have the money for it. This doesn’t seem fun, does it? But have the bigger picture in mind: clearing off your debt!
- Sell off what you do not need:
Do you have stuff that you have not used in the last six months? What is the probability that you will use them in future? Selling off stuff you do not need will bring in fast cash which can go a long way in clearing a part of your debt.
Do you really need two cars? Consider becoming a one car household. Consider selling off the second car and the family can car pool with the one which is left. If car pooling is not an option, other family members can take public transport or walk to work. This will assist by having scrapped off some expenses such as the extra insurance amount, extra parking fees among others.
- Ask for lower interest rates on your credit cards and negotiate other bills
Negotiating for lower interest is a common practise and very easy especially if you are timely payer of your bills. This will go a long way in reducing the amount payable for outstanding debt. Other types of bills can also be negotiated down and or eliminated. Do not be afraid to negotiate for lower rates. The worst someone can say is no. Here are tips to make you a better negotiator for lower interest rates.