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Finding yourself confronted with crippling debt burdens can feel like an impossible obstacle. With concerns about losing everything weighing you down, debt is widely considered one of the major causes of overwhelming stress.
However, there are a few ways that you can effectively manage your debts and avoid potential financial ruin. Here is what you can consider.
Reducing your Mortgage Repayments
High interest and endless repayments often keep homeowners awake at night. Then, when finances go awry, managing mortgage costs may seem out of your control. Luckily, there are a few solutions that will help you reduce your mortgage costs and hold onto your home. Opting for refinancing is just one of them.
Alternatively, you could consider comparing mortgage dealers and switching loan providers to save a chunk on your monthly repayments. If you have been devoting some of your savings towards renovations and home improvements over the years, you might be able to release equity on your property and reduce your total amount owed.
“The safest way to double your money is to fold it over and put it in your pocket.”
– Kin Hubbard
Adopting the Snowball Method
The snowball method is a valid debt reduction strategy that recommends paying off smaller debts first. By eliminating small debts, you will save a small fortune on interest rates and shrink your total debt amount.
Often, smaller debts boast higher interest. This is why avoiding microloans and clothing accounts is best as the interest is higher than more substantial loans.
Debt Recovery Assistance
Debt recovery services are an option for those who feel unable to make ends meet as a result of debt costs. These services assist by shrinking your total monthly repayment into one fixed amount that you can afford.
Therefore, the service will handle your repayments while also offering you protection from nagging creditors. Even though the solution is plausible in certain trying situations, the only notable downfall is that your credit score and lending status will be negatively affected during the process of eliminating debts.
Consolidation financing offers individuals the option of paying off all their debts with one larger loan. This method may seem somewhat unproductive, although the interest rate relevant to one loan will be significantly lower than that of multiple smaller debts. Therefore, consideration will help you pay off your total debt amount a lot sooner, and your credit score will be protected from ruin as well.
Before opting for a consolidation loan, you should consider the total monthly repayment for the full amount. If this amount is not within your reach, assistance services would be a more realistic solution.
Managing a debt burden will require a strategy that fits within your budget. Rather than accepting defeat, you should evaluate all your options and consider downscaling your current lifestyle to only spend within your means.
“If you think nobody cares if you’re alive, try missing a couple of car payments.”
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.