Living absolutely debt-free sounds more like a dream for some individuals. However, these days, it’s difficult to escape from debt when there are expensive home mortgage, car or university fees hovering over. The worst part is that credit card companies and other financial institutes tend to charge high rates for interests when offering loans. Some of us have no other choice than to accept these terms. And while it may seem like you will be able to pay it all off, later on, the interest rates increase these debts to hard-to-manage nightmares.
The good news is that there are many ways you can escape debts and better your situation. These strategies can include taking legal help through an IVA or create a foolproof saving plan to break free from debts quickly. You will no longer have to put your home at risk and escape the debts using very easy strategies. IVA is one of these strategies that can help debtors either reduce their loan amount or increase the time limit.
Other tips are described as follows:
1. Drop Luxurious Spending Habits
When drowning in debts, it’s best to drop some expensive habits. To get rid of all of the debts more efficiently and quickly, you must stop spending on luxurious habits. At least until you’re done paying all the loans. Evaluate whatever extra things you are spending on, such as drinking, smoking, outing with friends and expensive equipment or clothes. And it might not make sense right now, but in the long term, it will surely help you re-evaluate your life. You’ll be surprised at how much you are unnecessarily spending.
Not only will dropping these habits be beneficial for your health, but also help you lead a better lifestyle. By the end of it, you will save a lot of money from dropping some habits alone.
2. Get an IVA
You might have heard that an IVA or individual voluntary agreements can help many debtors get out of debts easily. An IVA is basically an agreement that is made with creditors. It’s led by a professional who is on your side and helps you to reach a mutual agreement. The best part – it’s a legal agreement that is made by the court and all relevant parties.
An IVA works through a legal insolvency practitioner, who looks at all the debts you have taken and then works out good terms with the credits. They make the creditors agree on an amount that you can afford to pay and in how many years you can pay it in full. Usually, it lasts five years or longer, depending on the debt amount and agreement.
3. Sell What You Don’t Need
If you’re looking for extra cash to help pay your debt much quicker, then it might be beneficial for you to sell whatever you don’t need. You’ll be surprised how much you can make out of things you don’t use anymore or are building dust in the attic.
If your house is situated in a residential neighborhood that allows garage sales, then doing a good old fashioned yard sale can do wonders to your bank account. You can also go to popular online portals such as eBay or Amazon or sell things at good prices. You can even hold a Facebook garage sale!
4. Pick a Side Gig
Sometimes it can be more productive and quicker to pay debts by picking up a side job. If you have a good skill or talent to monetize, such as babysitting or freelancing, then you can earn quite well. You’ll be surprised how some jobs can pay better than even your real job.
5. Try the Snowball Method
If you have more than one debt, you will want to use the snowball debt method to get rid of debts faster. In this method, you list debts from small to large. Then you throw all the bigger funds at small debts to get them over as soon as possible and throw small funds at the bigger loans. Once the smallest loans are paid off, you can start putting all the extra money on the biggest.
While it’s easier to live in debt and be in denial, it’s better to pay all the loans off as soon as possible. No matter what kind of loans you have, it’s important to know that there is always a way out. And while you cannot get out of debt in one night, you can definitely get over with it quickly. By following the strategies listed above, you can get out of debts faster and return to your normal life as soon as possible.