Many a time, we find ourselves plagued by huge amounts of debts that we cannot manage to pay back on time. On hearing about these debts, a financial advisor may recommend that you perform debt consolidation so as to have all the debts as one large debt and start repaying it slowly. In as much as it can help you remember to pay the debt promptly, it is normally very costly as it involves taking another loan with different terms to repay another loan. Good news is that one does not have to perform debt consolidation in order to repay a loan. There exist many alternatives that can be used to repay the loan helping you avoid paying more than is required for your debt.
Alternatives to Debt Consolidation Help
Instead of stacking all your debts into one massive debt, you could develop a strategy that will enable you to pay all your little debts in a stipulated timeline that would be suitable for you. Really, all you need to do is purpose to pay off your debts. The strategy below is one of the best known debt recovery procedures that does not involve debt consolidation
1. List all your debts from loans: This should be the first step since you never really know how much money you owe until you sit down and note down all your sources of debt which may include loans or even credit cards. Ideally, you should list them from the one with the highest interest to the one with the lowest. The one with the most interest should be purposed to be paid faster than the low-interest ones since as time goes by high interest loans accrue a lot of interest making them even more difficult to clear.
2. Add the loan minimum payment: When you note down the amount of money you should pay every month to clear the debt every month, it helps you stay focused on your goal of paying the debt.
3. Decide on Constant Payment: After knowing the amount of money you need to repay every month, it is imperative that you decide on when exactly you will be making the payments as this will serve as a great motivation for making the payment to completion. While you are deciding on the payment you need to make to cover the loan, you need to allocate an extra amount of money so that you can pay the debts faster. This extra cash may be gotten by doing some extra jobs here and there to supplement the debt payments.
4. Negotiate a lower interest rate: This technique only applies for credit card loans. All you need to do is call your credit card service provider and tell them that you are considering cancelling usage of the card. This will prompt them to find out whether you qualify for a lower interest rate which may work more to your advantage if they approve a reduced interest rate for the credit cards you have taken with them.
The above procedures will help you recover your debt successfully without debt consolidation. However, these methods need a lot of discipline to implement and can backfire if you are not disciplined enough.
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