Debt Management in 2021
Almost every one of us will go for a loan at some point in our lives – be it for buying an expensive item, to fund loved one’s higher education/wedding, to cater to a financial emergency, or more. Resultantly, we resort to apply for personal loans or buy a new credit card to help us with meeting these financial goals. However, the debt that we keep on accumulating calls for a smooth handling to ensure that these are paid off in time uneventfully.
Whether the debt is low or high, single or multiple; all debts, have to be managed in a manner that no repayment instalments are missed and the credit score isn’t negatively affected. If the amount of debt is smaller, you can easily shell out the repayments from your budget without much issue but as the debts grow, along with our financial needs, it is important to have a solid debt management strategy to avoid being stuck in financial hurdles.
To avoid being trapped in a pile of loans and credit card debt, it is crucial to understand how to manage the debt effectively. If you manage to handle all your debts wisely, you can avoid getting into a situation when you might have to make the repayments from your savings.
To avoid juggling with payments every time you owe one, we are sharing some wonderful insights on expert debt management tips to follow in 2021. Let’s get started:
Expert Debt Management Tips
- Know How Much You Owe & to Whom
If you want to get started towards having a complete hold on your debt, the first step in this regard is to know how much you owe and to whom. Sit down and make a list of all outstanding debts along with the creditor’s name, amount, due date, EMI, rate of interest, and more such details.
You can refer to your credit report and bank or credit card statements to start. This will give you a consolidated view and help you plan to minimize the chances of missing any repayment. Make sure you maintain a log of your debt and keep updating the payments.
- Be Timely with Your EMI Payments
It’s all about the habits you acquire while making EMI payments each month. If you miss an EMI, chances are that this may happen again as you may fall into a loop to cover for the previously missed EMI. The best way to combat this is to be always on time with the EMIs. The best way, however, is to pay your EMI in full and before due date each month.
Set up a reminder pattern in your smartphone to get alerts whenever your payment is due each month. Even if you miss paying an EMI, don’t wait till the next due date to pay the last one, rather pay it as soon as you can
- Prioritize & Rank Which Debts to Pay Off First
When you’re listing down all your debts, try assigning priority levels for each. Examples of priority debts are credit card debts and loan EMIs. Credit card bills have to be cleared off first because they’re the ones that have the highest rate of interest on outstanding balance. If you clear your credit card debts on time and in full, it is highly unlikely that you’ll ever land up in debt.
Similarly, loan EMIs have the same priority as missing out on loan EMIs have severe consequences leading to a dip in credit score, impacting future loan eligibility, and more. Prioritizing debt will make sure that you will never miss out on urgent and important payments.
- Make & Stick to a Financial Budget
One of the most effective debt management technique that can help you get rid of debt. Start by making a financial budget and list down your incomes and expenses side by side. Now think of ways to cut down your everyday expenditure (non-essential) and proportion that amount towards debt payment, no matter how small or big.
Next, prioritize your debts to clear the important ones first as missing them may cost money in terms of late fees and interest. While getting out of the debt cycle takes some time, if you are focused on the budget and follow it diligently, you’ll have a better grip over it.
- Set Aside Some Funds for Emergency to Fall Back On
Life is highly uncertain and you never know how and when financial exigencies may trap you leaving you worried and in debt. The best way to avoid getting into further debt to handle the emergency is to set aside some savings as an emergency fund.
Start by creating a small emergency fund enough to cover you for one month’s debt payments. Eventually, build it to cover up to 6 months of debt payments and living expenses.
- Apply for a Personal Loan for Debt Consolidation
Even after doing all mentioned above, if you find it hard to handle your debts, it’s a sign that you are in trouble and need help. This is the point where you can apply for a personal loan for debt consolidation. This is one of the best ways to consolidate all your existing, smaller debts in to a single larger debt. Eventually, you’ll see that you end up saving amount towards interest payments too as paying for multiple smaller debts can indeed be expensive
Personal loans for debt consolidation by Clix Capital are designed to fit in your budget and can be availed without any hassle. Just submit a loan application online. Post approval of the application, the funds will be disbursed to your bank account in just 15 minutes! *
The ideal approach for managing your debt effectively is to apply all the points above and gradually work towards increasing your savings for the future.
Or, avail an easy and instant personal loan online for debt consolidation from Clix Capital at attractive rate of interest to align better planning. After all, it’s better to pay interest towards a single debt than paying off multiple debts and high interest on smaller ones.
Let’s take a step towards a better financial future in 2021 with Clix Capital. Reach out to us at 1800 200 9898 and email us at firstname.lastname@example.org for any queries.