If left unattended, debt can quickly spiral out of control, causing havoc on your finances, your life and even your emotions. Getting into debt is easy – most banks and financial providers are happy to give out loans and credit cards to anybody who has a good credit rating, but it’s definitely paying it back the difficult part.
And, even if you signed up for a credit card responsibly when you were pretty sure that you’d have no trouble meeting the monthly repayments, what happens when your circumstances change? Debts can last a long time, and there’s no guarantee that you’ll always be able to repay them, every month. If your debt is getting a little out of hand, here’s what you need to do to get in back under your control.
Speak to Creditors
If you are finding it difficult to meet your agreed monthly repayments, don’t just ignore them and hope that they’ll go away – they won’t. In fact, the only thing that you’ll achieve by doing this is more debt, which will turn up on your doorstep in the form of missed payment and arrears charges. Instead, contact your creditors directly and explain your situation. Most will not want you to go hungry or expect you to scrape money together which you don’t have, and you will be able to come to a reasonable agreement with them.
Debt Management Plans
Another good way to manage your debts whilst still paying them off is to enter into a debt management plan. When you do this, you essentially pay a debt management company to take over your debt, and make one set monthly payment to them each month which they will then distribute to your creditors. This takes a lot of the pressure off you as your creditors will be dealing with trained financial advisors when it comes to the money that you owe, and you may in some cases even be able to have interest and charges frozen. You’ll also stop receiving letters and phone calls regarding your debt, which can help you to start living a normal, stress-free life again.
Debt consolidation loans are becoming more and more of a popular way to manage your debt. With a number of companies such as themoneyhub.co.uk offering debt consolidation loans even for certain people who have a poor credit rating, it’s easier than ever to take out a loan with which to consolidate your other lines of credit into one lower and more manageable monthly payment. This can be a great option if you have a lot of small debts with monthly repayments flying out every other day of the month. And, it can help to build your credit rating too, as your existing debts will be marked as ‘paid in full’ once you’ve taken out the consolidation loan and used it.
If you’d like to add any further ways to manage debt that we’ve missed, we’d love to hear from you in the comments.