Once we get into debt it can sometimes feel that it will be impossible to repay it. However, it is much more simple than you might think as long as you have methodical approach. There are various stages that you can work through that will help you.
- Make sure you repay the minimum on everything – to start with make sure that you are repaying at least the minimum amount that you have to on every loan. Find out what loans you have and check what you need to pay. Some may have monthly instalments; some may have option as to how much you repay and you need to make sure that you are paying what you have to start with. This will stop you accumulating extra fees and charges.
- Cut spending back in other areas – then you can start cutting back in other areas to free up money to repay more of the loans. For example, compare prices on the items that you are buying in order to make sure that you are not paying more than necessary for items. Also think about whether you really need the items you are buying or whether you can do without or wait for a while. This can be tough as you can feel like you are depriving yourself of things. However, remember that once the loans are repaid you will be able to afford more things as you will not have the loan interest to pay any more.
- See if you can increase your earnings – it can be worth seeing if you can get some more money coming in. You could do this through trying to get paid more, or changing your job, but you might also want to take on a second job. This is not something that will suit everyone though. However, it could be possible to make extra money in other ways. For example, you might be able to sell things you own and no longer need to get a lump sum of money, you may be able to take on a little bit of freelance work. You might be able to rent a room out to a lodger or you could do some questionnaires online to get some extra. Every large or small thing you try could add up to help you and so it is worth having a go.
- Decide which loan to repay first– once you start getting some extra money, you can start repaying a loan. However, you need to decide which loan to repay first. Some people like to tackle the little ones first. This means that they can get rid a few quickly and that gives them a feeling of accomplishment which motivates them to carry on. Some prefer to repay the most expensive first as this will mean that they save more money and therefore can repay the loans more quickly. Others have particular loans that they just personally wish they did not have and want to get rid of quickly. It is good have an order that you plan to tackle the loans in that you can work through.
- Concentrate on that one and then move to the next– make sure that you still keep paying what you have to on all of the loan but make repayments on the one that you are concentrating on. Work hard on that one and then move through the lost to the next one etc. It will take time and you may need to find ways to stay motivated throughout so that you can ensure you get through it. It could take a long time, depending on how much you owe, but will be worth it when you have paid them all off.