Banglore, India, May 24, 2023 – While loans and other credit products, like credit cards, can help by giving you financial assistance without splurging your life savings, it also doesn’t take a minute extra to fall into a debt trap. Whether it’s a high-cost loan or too many pending EMIs, if you’re looking for tips on how to get rid of debt fast, these eight ways can help you achieve that.
One of the best ways to clear your debt faster is by opting for debt consolidation. Here, you take out a small loan in order to pay off your existing debts, combining all your debts into a single one at more favourable repayment terms, lower EMIs, and lower interest rates. For example, by taking one personal loan from a credible online lender like KreditBee, you can consolidate your pending debts. You just need to know your repayment ability well and plan properly to ensure that this step is successful and that you actually end up clearing your debt.
It is great to take the help of technology to become debt free. Paying off all your debts need financial discipline, and automating your payments can help you ensure that all your payments are made on time so that you can escape late fees and additional charges that come with late repayments. Here, payments are automatically cut from your account on the due date and paid to the lender.
If you’re searching for how to get out of debt quickly, it’s about time you start to prioritise clearing them as early as possible. Delaying your repayment schedule only further pushes you into a vicious debt trap. Hence, it’s a good habit to pay off all your pending repayments to get rid of debt faster.
Segregate your loans into short-term and long-term categories for faster repayment. For example, personal loans and credit card bills are short-term loans with higher interest rates and less tenure, while auto and home loans are long-term loans. Try to pay off the loans with higher interest rates and other overhead costs so you don’t incur additional annual interest rates and get more debt standing on your head.
If the current budget set for repayment of EMIs from your income is not sufficient, you will have to make sacrifices by cutting down unnecessary expenses. Further, if your current income is insufficient for regular repayments, you may also need to start searching for ways to earn extra income to generate enough for payments.
Apart from repaying the existing debt, it’s also important you stay away from taking any more loans to clear debts faster. Taking more loans will only further drag you into a debt trap and make it even harder for you to get out of it.
Situations of economic shocks, like losing your job or other income sources, can be challenging in clearing debts. It’s always a better option to have emergency funds in your account worth three to six months of your current salary to prepare yourself financially for such situations. This way, you continue repaying your EMIs, avoid incurring heavy additional charges, and become debt-free.
If you have long-term loans like a home loan, you can ask the bank or financial institution from which you have taken the loan to extend your loan term. This will lead to increased interest rates, but ultimately it will lower your EMI payments and extend your tenure, giving you more time to clear your debt faster.
If you have a savings account with the bank and a strong credit score, you can try to negotiate the interest rates with the bank.
When you are in a debt trap, you would appreciate anything that would get you rid of the debt on your head. And if you have any assets like bonds or stocks, selling them off may help clear at least a portion of the debt, if not the entire loan. But before you take this step, ensure this is the last option you are left with. Assess your situation and see other options to clear the debt before liquidating your assets.
Getting stuck in a debt trap is a mentally draining situation. While loans and other credit products are meant to make your dream purchases more convenient, taking too many of them can eventually take away peace of your mind. We hope these eight tips help you clear your debt faster.
Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.
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