It is estimated that the average household debt in the UK is £63,528. Debt can be crippling and can impede your lifestyle, particularly if you don’t make your payments on time. Therefore, here are five key ways to help you get out of debt more quickly, enabling you to live more comfortably.
Make a payment plan
First and foremost, you need to find out how much money you owe, including interest. Add up all of your debts and keep track of them in a spreadsheet each month, then take back control from the very start. Once you know how much you owe, figure out a payment plan. Even if the minimum payment is enough for now, over time it won’t actually reduce what you owe. So, even if it’s just an extra $50 per month, make sure you commit to a payment plan which will reduce your debt every month.
The snowball method can be considered
A debt snowball method can be an effective way to get out of debt. Let’s say you have three outstanding debts:
A car loan for £1,500
A credit card with a balance of £4,000
A student loan of £6,000
When you’re faced with the task of paying off £11,500 worth of debt in one go, it can seem insurmountable. However, the debt snowball method requires you to pay off the smallest debt first while paying the minimum on all other forms of debt. As an example, you would pay off the $1,500 car loan first before moving on to the credit card. Using the snowball method can keep you on track and keep you focused on one debt at a time, which is beneficial for your morale.
Consolidate your debts
A debt consolidation program may be a viable option for you if you have multiple forms of outstanding credit. In debt consolidation, you apply for additional credit to clear all your current debts. Once you receive the funds, you pay off all of your outstanding debts in one go, and then make payment to the one creditor.
You can take out an unsecured personal loan for debt consolidation, and when done correctly, it can save you hassle and money each month. At Koyo Loans, we offer unsecured personal loans between £1,500 and £12,000. 24.9% APR Representative. Find out how debt consolidation can help you if you are servicing multiple forms of debt simultaneously. You should only apply for credit if you can comfortably afford the repayments.
Pay off debts with any windfalls
It is best to commit any extra cash you receive to paying off your debts if you receive a tax rebate or any other unexpected cash. You will need to be disciplined if you want to get out of debt faster if you want to go on holiday or buy a new car. If you receive anything during the year – whether it be inheritances or work bonuses – use it to pay off your debts.
Put an end to your credit card usage
If you’re trying to get out of debt, credit cards will make your life more difficult. You don’t have to cut your credit cards in half, but removing them from your purse or wallet will keep you from using them while you’re out and about. Using your credit cards less will help you get out of debt more quickly, even if you have to cut back on your expenditure.
Managing your debt with Koyo Loans
Many people have outstanding debts that they can’t pay off. Debt consolidation isn’t a viable option for everyone, but it can help you save money on your monthly repayments. The Koyo Loans calculator lets you get an idea of how much you could borrow and if consolidating your debt is a good strategy for you. All loan applications are subject to our terms–use this calculator only if you’re able to meet the monthly payments on the duration of the loan. For extended information about our loans, including our FAQ page, please visit koyoloans.com.
Koyo Loans is a trading name of BETR Technology Ltd. Company No. 11483187. Registered Office: Huckletree Soho, Ingestre Court, Ingestre Place, London, W1F 0JL.