ost people these days have some form of debt, which is not a problem if you can make the repayments but it's always worth looking at reducing the interest you are paying.
There aren't many people that don't have any debt at all; it is common, in our modern world, to have debt and that isn't necessarily a problem, providing you can make your regular repayments and don't feel overwhelmed by your debt. The problems only arise when the debt becomes serious and you cannot keep up repayments. If you are in this situation then contact an organisation like Citizen's Advice of the National Debtline for professional help resolving your debt issues.
If you would just like some easy tips to cut the cost of your debt then read on for ways to avoid paying too much interest and to more quickly become debt free, and take control of your finances:
Take an honest look at where you stand financially – that means looking at each and every loan or credit card on which you owe money, writing down how much you owe, the interest rate you are paying and how much that costs each month for the repayment or minimum payment on a credit card. Now write down you income and regular costs such as rent, bills, food etc and work out how much money you have left over each month. This needs to be enough to cover the cost of your debt otherwise you have a problem just waiting to happen. At this stage it pays to be completely honest about your borrowing patterns and whether you can really afford to live a certain lifestyle.
Consider debt consolidation
If you have several different loans and credit card accounts then you may find a good option is to consolidate your loans into one single loan with an overall lower rate of interest and with an end date so that you debt does not accumulate long-tern lie it can on an open-ended credit card or bank overdraft. But as with credit cards you will need a reasonable credit score to get the best deals, although there are still debt consolidation loans for bad credit circumstances or options such as guarantor loans that can keep the cost of the debt down if you have a parent or grandparent willing to act as the guarantor. Debt consolidation loans typically have fixed repayments for a fixed period so can help you work towards being debt free.
Take advantage of zero percent deals
Look out for zero percent interest deals with your current credit card provider (they will usually notify you by post so don't just bin communications from them) – not that they are unlikely to offer you a deal if you have a bad credit history. Or consider switching to another credit card company if they have a better deal – they are always on the look out for new customers and will tempt you with a great initial deal; but, again, not if you have a bad credit record. Just make sure you can pay off the debt before the deal expires otherwise you could find yourself paying more interest than before. Remember there is always a fee to make a balance transfer to a different deal so factor this in to your calculations before switching.
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