Dealing with overwhelming debts isn’t easy for anyone. However, the toughest of all times you will face when you are broke. Consuming all your funds and then running out of money will make you fall behind the monthly repayments. Regardless of having a fully customized best debt management plan in UK, if you cannot pay off on time, you need to make some instant financial changes.
First thing first, differentiate whether you’re broke or overspent. Just spending more than your monthly budget, or using all money on nonessentials don’t make you broke. You’re broke only if you have zero credit, cash or assets left to meet the ends and creditors or bailiffs start chasing you for the amount you owe.
Don’t make your financial situation worse by spending on no-bills and less necessary items – things you can live without.
Start with a Plan:
Despite the amount you have and what you owe, it’s only a well-informed plan that can help you deal with debts. Enlist your debt balance and interest rate.
Prioritize your credit accounts. Better to start paying off debts with the lowest balance regardless of the interest rate. Or, you can pay off higher interest loans first.
The best way is to pay the maximum affordable amount each month on one account while paying the minimum possible amount on all other accounts.
Ideally, you should start paying with what you have and try to free up more cash in your budget or build a savings account.
Make accurate calculations:
No guesswork will work for you. So, whether it’s creating a budget, or making temporary sacrifices only spend on worthy expenditures essential for your survival.
You can also use the best IVA calculator to determine how much you can waive off and then plan accordingly.
Stop creating more debts and see how you can cut more expenses to save money for emergency and repayments. With your creditor’s consent, you can make huge payments to get rid of massive debts. However, at the same time, review your bank statements and start cutting costs.
Try for lower interest rate:
Higher interest rates make it difficult to pay off your debts faster. So, always ask your creditors for lower rates. Now, by paying on time you will not only avoid additional charges or penalties due to delayed or non-payments but can also get rid of debts real quick.
You can also consider transferring, if your credit card issuer allows, money to your credit with a lower interest rate. You can easily take this advantage if you have a positive payment history and holds a good credit score.
Get consumer credit counselling:
consider reviewing your finances and determine a budget that can make monthly debt repayments easy. Credit counsellors are meant to work out for a debt solution with your creditors at affordable instalments depending on your monetary strength and assets available.
Pro Tip: Follow the plan religiously and take one step at a time to make your debt repayment process more efficient.
In case, the financial changes you make don’t work as expected, get IVA Experts UK help where certified financial advisors will give you best free debt advice and walk you through the custom debt solution suitable to your financial condition.