Debt accumulation not only has an adverse effect on your financial status but also harms your mental health and consequently the quality of your life. While debt settlement is certainly not a cakewalk, there are ways in which you can get out of debt smoothly. Read along to find the details.
Tips to Get Out of a Debt
1. Refinance the Debt
Debt refinancing refers to the process of replacing the existing debt with another debt that has more convenient and flexible terms and conditions. In a situation of non-payment, the debtor can refinance the debt to a lower interest rate. By doing so, you can save a lot of money on interest payments that making loan repayment an easier process.
You can do so with the help of a debt consolidation loan. It is a personal loan that usually has a lower interest rate than the existing debt. In the case of a credit card debt, you can consider transferring the debt to a balance transfer card. They are special cards that have a 0 percent Annual Percentage Rate (APR) for a specific time frame, usually between six to eighteen months.
2. Try the Debt Snowball Method
The debt snowball method is a debt settlement strategy wherein the debts are paid off in the order of the amount outstanding, from the lowest to the highest. By snowballing the payment towards the smallest debt, you can quickly eliminate one debt at a time and move on to the next one.
The most significant benefit of this method is that it gives a psychological boost and gratification which is very important to keep cool in a strenuous situation of debt repayment. Paying off one debt at a time also helps you build momentum and stay on track.
3. Go For a One-time Settlement
Another very popular method of getting out of debt is through a One-time Settlement. One Time Settlement refers to the debt settlement process wherein the creditor bank agrees to let go of a part of the outstanding debt on the condition that the debtor pays the remaining amount in a lump sum.
This offer is usually made after six months of non-payment of dues. The creditor bank upon receiving the request scrutinizes the debtor’s reason for non-payment and accepts it if it is genuine. This is one of the most convenient ways of debt settlement provided that you are able to negotiate well. Therefore, it is advisable that you take professional debt settlement services. In India Freed offers the best debt settlement services that can make the entire process very smooth for you.
4. Find Ways to Make More Money
Making more money is the most fuss-free debt relief solution. There are several ways to get some additional income that would relieve you of the debt and can also help you move ahead financially.
You could take up an easy peasy side hustle such as data entry, content moderation, teaching, etc. Alternatively, you can also monetize a hobby or sell off some items that you no longer use but could be of value to others. Since the thrift shopping culture is prevalent, it wouldn’t be too difficult.
Bottom line is that debt settlement could be very daunting and thus you have to keep your cool all through to be able to come out of it smoothly. While there is no one-size-fits-all solution that can be suitable in all situations, you can use the above-mentioned methods to make the process smooth and less stressful.