The pandemic was stressful enough. To make matters worse, many people lost their jobs and had to incur debt to make ends meet. If you’ve accumulated too many bills in the past few years, here are some tips to eliminate that debt.
1. Look at Getting a Consolidated Loan
If you have a lot of credit card debt at high-interest rates, look at getting a consolidated loan. Loan consolidation companies like Priority Plus Financial can often provide you with a loan at a lower interest rate. Instead of making several payments, you only make one each month and typically pay less.
With a consolidated loan, you can pay off your debt in a shorter amount of time and even improve your credit rating. It will ease your stress as well.
2. Determine Which Debts Are High-Priority Debts
While it’s important to pay off all of your debts eventually, some are more critical than others. Those debts that are secured by collateral, such as your home or automobile are considered high-priority debts and must be paid or else you could lose those assets.
Utility bills, including your water and electric are also critical debts. These must be paid along with your home and automobile. Child support payments are another high-priority debt. Fail to pay these, and you could wind up in jail. Pay off all of these high-priority debts first and then focus on debt of a lower priority.
3. Talk to Your Lenders if You Might Not Be Able To Make a Payment
This is especially crucial if you have secured debt, such as a car payment or mortgage. Ignoring the problem isn’t wise. You could end up having your automobile repossessed or your home foreclosed on. Instead, call the loan company and explain your situation.
4. See If You Can Qualify for a Hardship Program
A hardship program is a new payment plan that you negotiate with your lender. Sometimes the lending institution will lower interest rates or waive fees over a specific period of time. You may qualify for such a program if you have a family emergency or you’ve suffered a serious illness. It also applies if you lost your job or got a cut in pay.
If you have more bills than income, you may be tempted to ignore the problem. That’s a fatal mistake. Always be proactive about debt. Swallow your pride and ask for help. It’s the best way to heal financially.