Nowadays, taking a loan is easy. You can apply for a loan in ten minutes, and there are options when you do not need anything other than a passport for this. With the money you can buy anything you want: a car, household appliances, an apartment. But what if, at some point, the situation got out of control and you found yourself on the verge of bankruptcy? How to get out of a credit hole? Let's give some practical advice on this.
Minimum payment
Credit card holders often make one mistake. Often, banks provide the opportunity to use a credit line provided that only interest is paid. This is the minimum payment. It would seem that such a scheme is very convenient. You can agree with this, but it is only beneficial for the bank, and not for you. If you make only minimal payments on a monthly basis, then the question of how to get rid of credit debts will never cease to be relevant for you. Experts estimate that a person who takes, for example, 300 thousand rubles at 18 percent per annum and makes a minimum payment each month, will have to pay the debt within 26 years, while in the end he will give back an amount that is almost twice the original amount. Would you like to puzzle in the future how to get out of the credit hole? Then immediately try to allocate as much money as possible to repay the loan. If the minimum payment is five thousand rubles, pay ten, in general, as much as you can, but most importantly - more than what the bank requires.
Small and large debts
If a mistake has already been made, and you still swallowed a credit hole, do not make new oversights. So, many borrowers, having found themselves in a difficult situation, first decide to pay off small debts, and then think about large ones. The logic is clear: firstly, it is difficult for a person to keep information about all loans in his head, especially if there are a lot of them, and he wants to get even with at least some, and secondly, it is psychologically easier for many to have one large loan than a bunch of small ones. However, such reasoning is fundamentally wrong! In order not to forget about any duty, you can transfer information to a computer. Now there are many special programs for accounting finance. Get an electronic ledger, and it will be easier for you to manage not only debts, but also money in principle. Remember: it is more profitable to first repay large loans, those that are taken at the highest interest rates and imply the largest overpayments. But if the interest conditions are the same for all loans, then, indeed, it is more advisable to deal with small debts first - this will be a good motivation for further repayment of large loans.
Credit limit
Many see a way out of the predicament in increasing the credit limit. Let's say right away: this is not an option at all! Thus, you will only delay time, give yourself a respite, but do not change the situation for the better, but only exacerbate it. Raising the limit will lead to an increase in the loan term and the obligatory monthly amount to maturity.
Debt Consolidation
Some borrowers who are looking for options to get out of the credit hole go to the bank and ask to combine a number of debts into one big loan in order to increase their repayment term and reduce the amount of monthly payment. In principle, the approach is reasonable. But there is a problem. Such a scheme has been debugged in the countries of Western Europe, but only refinancing of loans is available to us , that is, obtaining a new loan to repay old ones, while all sorts of preferences and discounts are not available. But the main thing is that the refinancing process involves the payment of various fees and commissions, therefore, in the end, efforts can be useless, and the amount of debt will only increase. Such a solution can only be beneficial in relation to long-term loans, for example, mortgages, and only in the case when you took a loan at very high interest rates.
Crisis plan
Now we directly proceed to the story of how to get rid of credit debts. The first and most important thing is to secure the trust of creditors. You will not be able to avoid payment in any way. Therefore, do not hide from banks and individuals to whom you owe. Tell your difficulties upright, make it clear that you are not going to avoid obligations. Perhaps you will meet, and will be able to find a way out of a difficult situation.
Order in finance
If you are the owner of numerous debts, it means that you do not know how to keep records of personal money, and in financial affairs you are in a complete mess. Start controlling costs and revenues. Record all your expenses daily to know exactly what the money goes for. Try to keep such bookkeeping for at least a month, and then analyze your financial situation. Pay close attention to the costs, perhaps any of them can be avoided and thus save. Then make a budget for the coming month. Indicate all possible revenues, as well as planned expenses (be guided by the accounting data for the first month). No matter how hard it is, stick to your budget and don’t spend more than it’s planned. So you can clean up your finances and maybe find a way to get out of the credit hole.
Revenue increase
Paying debts when you already live from paycheck to paycheck is, of course, difficult. Where in this case to find additional funds? Perhaps it makes sense to take on more responsibilities at the main place of work, of course, for an additional fee. If this is not possible, it would be advisable to find a third-party side job. Having properly organized your working hours, you will surely be able to increase income.
Borrow money
The idea of new loans from debtors causes trembling and bewilderment. How to get out of a credit hole if you borrow more and more? In fact, this option may be a very wise decision. Only borrowing should be from people who do not require high interest from you. Do not hesitate to contact relatives and friends with the words: "Help me out of the credit hole!" People to whom you are dear will certainly help if you can. In addition, they will not require you to return the money in a strictly specified time, so you will not have an exact framework for paying off debts. But, of course, it is not worth undermining the trust of loved ones. Return borrowed funds as soon as possible.
Buy Sell
The hero of the famous Soviet cartoon, Uncle Fedor, said: "To sell something unnecessary, you must first buy something unnecessary ...". One cannot but agree with this statement. But you can sell and what at first glance seems necessary. For example, a TV, especially if you have a plasma and expensive one. So you can not only earn extra money, but also free up the time that used to be spent watching TV shows and movies, for something more useful, for example, thinking about how to get out of the debt hole. Perhaps it makes sense to abandon the car during a crisis. You will not spend money on its maintenance, repair, fuel, and so on, and you can put the money saved on paying off loans.
Finally
Now that you know how to get out of the credit hole, take action! And when the financial nightmare is left behind, forget about loans forever! Better to save first, and then buy. And yet, if you desperately need money, and you again decide to borrow, remember the limit: loans should not exceed fifteen percent of annual income.
Before you take a loan, carefully study all the conditions of the bank, the size of possible commissions, terms of payments and so on. Calculate how much the loan will actually cost you, think about whether you are able to repay it, and whether your family budget can withstand such a load. Be financially literate! Good luck