When it comes to dealing with debt, it’s easy to let panic to set in. You might scramble to create a budget, to start saving money, to downsize the home, sell what you don’t need, and do anything to tip the scales in your favor. Those are all good ideas, but they’re not the only options available to you.
Order your debts
Setting up a budget to start paying off your debts is a good idea, there’s no doubt about it. But it’s only one-half of the organization you need to really create a stable and smart approach to paying off debt. The other one is to start prioritizing between different debts, to find out which one you should pay first. Every debt should get the minimum payment, that’s non-negotiable. But you need to think about what will help you pay the least amount of money. This means ordering them in terms of urgency and interest rates. Tackling smaller debts and getting them off the board might be easier, but is it worth it if you’re accruing more and more interest elsewhere?
Shuffle your debt
When you’re digging your way out of debt, having multiple debts can sometimes make it harder to manage, not easier. Especially if some of them have interest rates you just can’t keep up with. Moving debt to other creditors and consolidating can sometimes be a very smart move to give you more breathing room to deal with them. However, sometimes it’s not the best option. If you have a fixed interest credit card debt you’re dealing with, for instance, it might be better to keep it there where it will grow slower, than in a debt loan where interest could grow further.
Look at the niche providers
If you’re not happy with the deals currently on offer for you, then you might need to look beyond the usual loan sources and see if there’s any assistance for people specifically like you. For instance, if you’re an ex-service member, then organizations like Omni Military Loans might be able to offer a much better consolidation service than you would otherwise find. If you’re a cancer patient, the Cancer Finance Assistance Coalition can help you deal with costs that might otherwise put you into debt. Think of the specifics of your life and see if they might qualify you for any further help, in loans, grants, or otherwise.
Talk to your creditors
It’s not an option that a lot of people take because they are justifiably scared of coming into contact with the people whom they owe money. However, many creditors don’t want to see you have to start giving up your assets to pay them back. Get in touch with them early enough and you can ask for lower interest or an extended repayment period. Even if it gets to the collectors instead, you could negotiate a debt settlement before it goes too far and becomes too difficult to deal with.
It pays to be calm and to see what circumstances you’re really in. To know where exactly you should be putting your money, when you can get a debt settled much better in your favor, and when a bit of niche assistance can really help.