According to a study, Australians have nearly twice as much debt as their income. The chances are, you might as well have reasonable debt to leave you sleepless through the nights.
How would it make you feel if I were to tell you a way you can easily get rid of your debts? And that too for good.
Well, keep reading to know more.
What is a Debt?
The amount of money that a borrower owes to a lender including the principle and the interest on it is known as a debt.
Debts can be repaid in several forms and do not necessarily need to involve a monetary transaction always. For instance, people can repay their debts by offering valuable assets as collateral.
But, surely when the amount of debt is too high, alternative methods of payment might not suffice. You may need to think of paying off your debt, as soon as possible. And thankfully we have some tips for you.
Ways to Rid of your Debt
Here are some tried and tested ways to escape the never-ending debt cycle.
1. Choose a Debt Consolidation Plan
A debt consolidation plan can help you merge many debts to be repaid into one. In other words, you’ll be making only a single repayment instead of paying each of your creditors separately. There are all sorts of plans from flexible interest terms to fixed terms.
2. Debt Management Plan
Unlike a debt consolidation plan, a debt management plan does not pay off your outstanding debts. It only helps manage them. To put this into perspective, your debt manager would be communicating with your lenders for any repayment requests or issues.
However, a debt management company or a manager would charge a service fee on top of your monthly repayment. Nevertheless, choosing a debt management plan can help simplify your debts and keep track of them at the same time.
3. Budgeting and Investment Planning
While both debt management and consolidation are likely to help you steer through piling debts effortlessly, they’ll on the other hand also cost you a little more than your actual debt. This is because the service providers would charge for the services they are offering. So, if you wish not to be paying these extra costs, then you should start devising your own budget.
It needs no saying that a firm and sustainable budget can help you get out of any financial hiccups. But there’s one more thing you can do to further strengthen your financial status. You should look forward to investing your money.
Well, there are plenty of investment plans that could not only keep your hard-earned money safe but also bring in good returns.
Regardless of whether you choose to go with consolidation or investments to rid your debts, it is rather important that you keep track of your budget at all times. Having a firm budget in place, as already mentioned is far better than having to enroll with any of these plans.
Nevertheless, if you still need to choose amongst these, it is rather suggested that you explore your options from various plans available in the market, and decide wisely.