Getting into debt can be both a good and bad thing. For instance, if you want to establish a credit record, getting a credit card or store account may be a good idea. The trick is to make sure that you keep up with all your repayments and that you don’t become over-indebted.
If you’re struggling to manage your debt, you should speak to your credit providers.
How to get out of debt
Your creditors may be able to assist you with debt rescheduling. This generally involves extending your loan repayment period.
Consolidation may be another option. Over a specified period of time, a debt counsellor may help you reduce your total monthly debt repayments. This may be a good step towards getting out of debt.
A good place to start when you want to get out of debt is to list all of your debts. Draw up a list of all of your debts and note each debt’s total amount owed, minimum repayments and the interest rate. Set up monthly debit orders for repayments.
Prioritise your payment goals. For instance, you could use the money you save to tackle the next debt. If you earn a bonus at the end of the year, you could use this money as a fast way to get out of debt. Another option could be through finding ways to earn extra income.
Be realistic about your debt. Keep in mind that the longer you take to repay the loan, the more interest you’ll end up paying in the long run. If you don’t pay, you’ll incur penalty fees.
Ensure that you deal with any unauthorised debit orders. Be vigilant about checking your bank statement.
Make a conscious decision to stop borrowing money. Avoid taking out more loans or credit cards. You could even consider using cash only to make payments.
Create a realistic budget and make sure that you stick to it.