Debt Management Tips In GhanaTo Overcome Bad Debts
Almost everyone has ever been in debt before and there’s no doubt about that fact. We all know that once you owe money to someone you will have to repay, but when your loan or debt gets out of your control to repay that’s a bad debt and it’s only debt management that can set in as a relief. Loan or debt repayment is an everyday issue on it’s own where people go through financial constraints to get their debt paid to cut off the growing debt. You already know that when a loan is not repaid in the due time, interest keeps growing until it’s sorted out. Sometimes debtors get their loan interest even bigger than the principal money owed, this can be a killer debt that can badly affect the credit score of such victims. How you spend your borrowed money can verily affect your ability to repay. Yes It is so! How you spend it matters a lot.
How Do You Use Your Credit Card Or Loan Amount?
One may say this doesn’t call for anything, but I say it calls for something because how you use your credit card, or loan amount will readily tell whether you can repay your loan or not. If it’s invested into profitable ventures, that means repaying your loan wouldn’t be difficult to do. Apparently, if you spend your credit card on groceries, fashion clothes, designer wears and of course dining at the best restaurants. Without any hope for side income, lol i’m sorry you’ll be highly indebted. Others sometimes mistakenly pay their bills, rent, recreation etc on credit and at the end of the game, they’ll be swimming and bathing in the pool debt. If it’s loan, use it on assets that has the potential of repaying your debt with the interest. And if possible, if it’s not about an asset, forget about loan and focus on your income for your liabilities.
Debt Management Tips In Ghana To Gradually Erase Debt Completely
Debt management refers to the effective measures outlined to control or reduce debt through proper planning. When you are already overburdened with debt and don’t know how to get out of it, there’s a craving need to read this post to the end. Sometimes when you are engulfed with bad debt, if strategic repayment plans are not made, you could just dissolve in debt. There’s the need to take effective measures that will control additional debts, reduce current debt and eventually making you a debt-free person.
Importance Of Personal Debt Management
As said earlier, the objective of debt management is to control debt increment, seek debt reduction with the final aim of eliminating it. Personal debt management is important to debtors in the sense that;
1. Debt management helps to control the rising of debt through early repayment.
2. It helps to reduce and gradually scrape away debt.
3. Debt management reduces outstanding and unsafe debt accumulation.
4. It enhances debtors to regain control of their personal finance
5. Debt management reduces interest rate .
6. It enhances flexible repayment period.
7. Debt management protects your good credit score or financial credibility.
8. It’s a secure means of getting out of insecure or bad debts.
Debt Management Tips To Control Debt
Debt management seems to be the only remedy for people battling with bad debts that may lead them to financial constraints. Below are the best practices of debt control you may consider.
Identify who you owe and the amount you owe: The first step to personal debt management is to identify all those you owe and the amount of money owed at a given time. Knowing this helps you make plans on who to repay first and how to make repayment. It reminds you to take swift action to settle your incurred debt.
Make a repayment budget: Consider making a repayment budget to repay huge debts first and then lesser debts. Making a repayment budget allows you to adopt a repayment plan that will suit both you and your creditor.
Consolidate your debt: Take out one loan with lower interest rate and pay off your bad debts. This normally allow individuals to pay high troubling debts in a single and flexible loan.
Make timely repayment: To avoid piling up your debt with increasing interest rate, consider to make repayment on time.
Cut off your huge spending: Control your spending habits if you are more a spindrift to avoid huge expenditure that will compel you to use more of your credit card or loan.
Make full payment of outstanding amount: To avoid interest increment, it’s advisable to pay all your outstanding debt, chances are that, repaying your current balance could reduce your credit utility rate and giving you good credit score.
Make Extra Payment than usual monthly repayment plan: Make extra payment to settle your debt even if you have completed paying for your scheduled and due time monthly payment to reduce your loan amount, if you have extra money. Do this with more enquiries because some banks will charge a payoff interest for breach of terms.
Set up Emergency savings account: You should have an emergency account that will seek to cover unforseen contingencies to avoid getting into debts in times of emergency.
Get debt management plan(Financial Experts): Debt management plan also called DMP allows you to control your debts and repay with a lower rate by repaying a monthly reduced payment. Here, you make a monthly single payment that covers all your unsecured and bad debts. Debt management plan is done by consulting financial experts to draw the plan and see to it that it’s paid accordingly.