Debt consolidation loan is a very vital tool in every individual’s life, especially if you are running into debt. If planned properly, it can get rid of debts, open financial freedom and make your future safe and secure once again.
5 different ways in which you can renovate your debts with debt consolidation loans :
Today, we will discuss, 5 different ways in which you can renovate your debts with debt consolidation loans
Step 1: Identify your debt load
Before you find out the solution to the problem, you need to pinpoint the problem. Hence, you need to open all those unopened bills and statements. You need to know how much you are in debt. Running around is of no help, so open those bills today.
Keep in mind that all debts are not bad. For example: if your mortgage debt is way below 25% it means that it is a good debt but if your consumer debt is high it means it is a bad debt.
Now calculate the total amount of money that you owe and need to pay. It is good to have a clear conception from the beginning.
Step 2: Create your budget
How much money do you need on a weekly basis? Find out about the amount required. Now multiply this amount with the rest of the weeks and keep some extra money for emergency purposes – and you will have a budget in hand.
To save extra money, limit your visits to the restaurant, movies and other entertainment places. If you normally go to a restaurant 2 to 3 times a week, limit yourself to one time. You will be amazed at the amount of money that you will save at the end of the month.
Step 3: Get your consolidation loan
Talk to your financial advisor to find out more about debt consolidation loan. There are many financial institutes out there who offer this loan at interesting discounts. Compare the different loans to find out which one works best for you.
Step 4: Pay off your debt
Sit down with your financial planner and have a clear discussion regarding your financial goals. Find out which debts need to be paid first and which can be paid later. Moreover each debt has a time limit within which you need to clear it off otherwise you might be charge extra interest or may have to pay a penalty amount.
Step 5: Stick to the plan
Debt consolidation loans will work out only if you stick to your plan. Once you have cleared off certain debts, you need to move the payments to the next level before all your debts are cleared off.
And yes, just because you have successfully cleared your debts does not mean that you can go back to your old ways. You need to learn where to spend your money and learn how to save so that you can retire when you want and with enough financial savings for a tension free retirement life.
Go ahead and contact your financial advisor to know more about the different debt consolidation loans.