Mistakes People Make
When you’re burdened with multiple debts, it’s easy to lose track and end up not paying on time, thereby attracting late payment fees and perhaps even eventual debt recovery process. You might not only miss out on interest free periods, but also end up paying hundreds of dollars a month for late fees.
Another mistake people make is that they make only the minimum payment to cover the interest amount without thinking about ways to clear off the principal.
People try to avoid banks, especially if they are sure they won’t be able to meet a repayment schedule – that’s unfortunate because communicating with the bank might actually help you to defer payments or save you from late fee charges.
When people opt for consolidation, they may forget to close their high risk personal loans which would still attract charges even if they’ve moved it to a low interest consolidated loan.
Efficient Debt Management Solutions
One of the best ways to achieve efficient debt management is to seek the advice of professional debt management companies, but more on that later.
The first step you can take is to stop accumulating more debts on your credit cards and overdrafts. This simple step can help in reducing your minimum monthly repayment schedule.
You can get rid of all your debts on high risk personal loans by opting for consolidation method. Some lenders might be charging you up to 20 % or more by way of interest. A possible solution for this is to combine all your debts into a single debt which can clear off by taking a low interest loan. Professional debt management companies have contacts in the finance industry and can easily source such loans for you. This will help to shelve your interest liability and lower your overall debt burden.
Find Cheap Service Providers
Budgeting is another simple, effective means that even professional debt management solutions providers advise. You can easily make a note of your expenditure and income every month and see if there are any areas where you can cut costs. For example, you can always find good deals and bigger savings for services such as internet, phone, cable TV or health insurance. You can use the money saved to clear off your debts.
Reducing the Principal
Consolidation packages offered by debt management companies can help with interest rate reduction, but you also need to think of ways to pay off the principal amount or else you might end up having to deal with debt recovery hassles.
You can do it by giving priority to your debts and using any monthly savings to pay them off. Traditional savings avenues such as bank deposits hardly offer more than 6% rates of interest whereas your debts attract much higher rates; it makes sense to use part of your savings to eliminate debt completely.
Professional debt management companies offer affordable and realistic debt relief services – they can help with consolidation loans for debt, mortgage refinancing loans, debt agreements and more. Speak to a professional to have your financial matters sorted out. It’s worth the time and money to get some peace of mind.