When government announces a lower rate of interest, you can approach the credit agency to lower the rate of interest. This way you can pay at lower rates. This is because the interest rates normally increase, and when this happens, the lenders will increase your tenure and ensure that you pay more. But, they will not give a rebate when the rates go down. It, therefore, becomes necessary that, for your financial interests, you keep track of the interest rates.
Once you have incurred in debts, you have to plan how to repay the amount to your creditors. One of the best methods is debt consolidation. There are several firms available for this purpose, but you have to choose the most reliable one. It is definitely not possible to eliminate all your debts overnight. If they assure you of that, then you are at the wrong place, wasting your time or rather getting trapped. They may just quote an amount over the phone without even meeting with you. Their fees may be very high. Don't get trapped in their flattery words; they just want to make money, and you are victimized as a money-making machine.
On deciding the consolidation company, it is necessary to work out together on all financial matters. Start with clubbing all debts into one, slashing the higher interest rates. Now, you can pay lower monthly installments. These companies are now the mediators between you and the creditors. They also convince the creditors to reduce the interest rates.
If you are in a very bad financial state (like you are not in a position to pay the minimum required payment per month), debt consolidation may not be the right option. In any case, you'll not be eligible for the program. It is important to keep up your morale. You can still get out of this miserable condition through the settlement programs.
These programs offer many options to clear your debts. It reduces the principal amount, eliminates the late fees, lowers your APR, and provides you the flexibility to repay the amount within your chosen time period. The advantages of this program are:
- You don't have to starve for paying the minimum monthly payment.
- You get time to save money and change your lifestyle.
Unsecured Credit Card Debts
The credit card loans do not have a fixed amount attached to the payback. The interest rates keep building and if there is no proper plan of action, the amount it will take to pay the loan will be triple or more than the original balance. If numbers, due dates, interest rates, and minimum payments are confusing, financial plan is very much the need of the hour.
To avoid such conditions, it is advisable to have only one credit card, which must be used wisely and only during emergency. If you, however, have hit the pit, start saving money from avoiding unnecessary expenditure. Try to save money from every opportunity. For example, packing lunch from home can save nearly a thousand dollars each year. Let's say at office, you pay USD 10 for lunch each day. On average, you work for 22 days a month. And this accounts for USD 220 each month. By packing lunch from home, you save USD 2640 a year.
To sum it up, here are some suggestions:
- Be honest but represent your financial position to be unfavorable.
- Try to avoid other debts.
- Do not disclose your workplace or your bank.
- If not sure of being in good stand in comparison to the crediting agency, do not hire a lawyer.
- If you have contracted more than one creditor for the same loan, be sure that your account is sold off to a second creditor. By this, you can avoid the first creditor.
- In all probabilities, once you have settled the debt, you may have to pay income tax. Your creditor will send you the related documents at the end of the financial year.
These are only a few ways to save money. Make several such savings and you can find that several dollars are being put in to get you out of the debts. Your first priority is to settle all of them. It is very satisfying to be free of this burden, and moreover, you will have acquired self-control and persistence.