How to pay off your debts
- by Ryan Smith
- Published on 2/20/06
- Article views: 481
It is neither desired nor it is morally correct to live long in debt. Whenever you feel that you are drowning in debt, try to hold the helm before it is too late. And if you are already in a state of deep-debt, do not wait for the calls from collection agencies. Think some strategies to pay it off ASAP.
Now the question comes how to pay off the debt? How to plan for it? What is the right way to proceed, so that one can get out of debts without any hassles? Well, there is no generalized solution for the problem. The solution entirely depends upon the financial state of each individual; however, some all-purpose solutions are suggested here, keeping in mind the most problematic financial conditions possible.
Before the proper debt solution is suggested, a few case studies were made and the research yielded the following results. The solution for the respective case is mentioned along with.
Case 1
One high amount loan - It is a very rare case in our country. The normal trend here is to take loan from different creditors and normally the interest rate also varies for different creditors. Anyway, if you have a high amount loan and you wish to close it now, then you can take a loan too, to pay it. But before that, it would be wiser to consult a counselor, who is the best person to suggest if your pocket would permit taking a loan.
Ultimately, if all the points go in favor of you, and finally if you start the debt repayment program, be careful about not going for any unnecessary loan until you are free from the previous one.
Case 2
A number of loans from different creditors and of different interest rates - The number of candidates in this category is much more in our country. So this is the most common type of example of being in debt. There are three solutions to overcome this situation.
First, select the highest loan amount, and start paying it back. For example, say, you have a few loans of amount 22,000, 5,000 and 80,000. Then first pay off the loan of amount 50,000.When the process will be going on, you might have a tight budget, but face it. As soon this loan is paid, your monthly installment is going to drop dramatically. And it is going to give you a kind of mental strength also that - "Oh! I have paid off the highest amount!"
Second, select the loan for which you are paying the highest interest rate. And pay it first. Suppose you have four different loans for which you are paying, say, 9.9%, 11%, 17% and 5% interest. Then first pay back the loan for which you are paying 17% interest. It will reduce your monthly payable installment and you can see the effect from the next month.
Third, start paying the small amount of loans and start from the lowest amount. This strategy is helpful when you have too many loans. If your loans are of amount, say, 2,000, 18,500, 4,600, 9,000 and 50,000, then pay 2,000 first, then 4,600 and so on keeping the 50,000 loan aside.
One may ask how this strategy is effective? Is it a good policy? Well, the answer is yes, because, it is easier to pay the small amounts as it will not impart a heavy load on your monthly budget and you will be relaxed to know that instead of having five loans you are now with one high amount loan, for which you can go for a consolidation loan too, and the installment and interest rate for consolidation loan is usually lower.
Select the right strategy for yourself and forward the first step towards debt free living. Get more information on debt consolidation. It seems to be the most powerful option to pay off debt.
Ryan Smith is a Debt Samaritan and voluntarily works for Debt Consolidation Care community. Besides content development he actively participates in
Debt Consolidation Care forum
More Articles
-
-
-
» Latest articles
-
» Highest rated articles
- Staying Clear of Credit Card Debt Trap
Credit cards are good for emergency. Using plastic money for buying day to day products could push consumers in deep debt. Debt Samaritan offers good suggestions for credit card users in this article.
- Get Out of the Hole with Secured Debt Consolidation Loan
Secured debt consolidation loan is designed for the individuals who are under the grip of multiple debts. You get a sigh of relief after consolidating you debts into a single loan. Secured debt consolidation loan helps in managing debts in an organised manner.
- How to pay off your debts
It is neither desired nor it is morally correct to live long in debt. Whenever you feel that you are drowning in debt, try to hold the helm before it is too late. And if you are already in a state of deep-debt, do not wait for the calls from collection agencies. Think some strategies to pay it off ASAP.
- How to pay off your debts
It is neither desired nor it is morally correct to live long in debt. Whenever you feel that you are drowning in debt, try to hold the helm before it is too late. And if you are already in a state of deep-debt, do not wait for the calls from collection agencies. Think some strategies to pay it off ASAP.
- Staying Clear of Credit Card Debt Trap
Credit cards are good for emergency. Using plastic money for buying day to day products could push consumers in deep debt. Debt Samaritan offers good suggestions for credit card users in this article.
- Get Out of the Hole with Secured Debt Consolidation Loan
Secured debt consolidation loan is designed for the individuals who are under the grip of multiple debts. You get a sigh of relief after consolidating you debts into a single loan. Secured debt consolidation loan helps in managing debts in an organised manner.
- The Mysteries of SEO
SEO, or search engine optimization, is the most important element in building a successful website. Most people online have heard the term SEO and have some idea of what is involved yet it remains a mysterious process to many.
- How can Your SEO Keywords make Money?
As you likely know by now, there is a big difference between effective, quality website content, and search engine optimized (SEO) website content that will obtain the highest ranks in search engines and directories such as Google, Yahoo!, and MSN.
- How to write your first Ebook?
One of the most excellent ways to build your online income is by writing and distributing Ebooks. Ebooks can be a very helpful tool for marketing your business and they can also be big money makers.
- Top 10 Photo Recovery Tips
Perhaps you have a capacious memory card. Maybe you simply trust the technology of your latest digital gizmo to forever shield your data from harm.
- 3 Rules to Follow in Your Logo Design
When designing your own logo or getting it done by logo design professionals, ensure the following three basic rules and you will have a great and memorable corporate identity.
- Reiki and how it can help you Heal
Reiki is a valuable healing tool which involves the practitioner placing his or her hands on the client without actually manipulating the body in any way. This makes Reiki an ideal healing tool for people who suffer from all kinds of conditions, both physical and emotional. This article discusses what is involved in a Reiki session and what training a Reiki practitioner undergoes.
- A History of Vintage Automobiles - From 1916 to 1924
Before cars were around, people usually traveled distances using horse-drawn carriages. But as early as 1335 several bright minds have been trying to come up with a 'horseless carriage'.
- Common mistakes before starting a website
If you want your website to be a big hit then you need to avoid some common mistakes before starting one. Here you have a list of pitfalls that are designed for beginner and for many established ones too. Check out the common mistakes that have to be avoided for sure!
- How to Create a MySpace Layout
Creating a MySpace layout might seem tricky when you think about it but it is actually pretty easy. Here's a few steps that will help you in designing myspace templates.
- Ecommerce Checkout - Make Them Register
The world of ecommerce is expanding daily as more and more retailers take their business to the web in the hopes of attracting a percentage of those ever finicky web shoppers. As the amount of businesses open up ecommerce shops online, the amount of web development companies is also growing, offering ecommerce solutions for even the smallest of budgets. It is important that web developers understand the dynamics of the checkout process when discussing the options with the client.
