How to Create an Effective Debt Repayment Plan
Borrowing money is something most of us will need to do at some point during our lives. Whether it’s for a new car, a new kitchen, or a home of your own, there’s a good chance you’ll need to seek out some financial support at some point. However, the longer you spend repaying what you owe, the more stressful the experience can become.
If you decide it’s time to wipe the slate clean, creating a strong debt repayment plan can be an excellent way to jump into action. The right plan will guide you through how you can pay back your owed cash as quickly and painlessly as possible. So, how do you get started?
List and Organize Your Debts
First, you’ll need to be able to see all of your owed money in one place. Create a list of all the loans you’re dealing with right now, complete with interest rates, minimum payment amounts, and how much you owe in total. Make sure you look at everything from personal loans and credit cards, to the money you borrowed for your college education. You might find you can even minimize some of these expenses by combining or refinancing them.
When you refinance student loans with NaviRefi, you can reduce your stress levels and your monthly repayments to ensure you have more cash left over at the end of each month. Once you have your list, rank your debts according to their importance (or which you want to pay off first).
How you rank these products will depend on you. Some people recommend paying off the highest interest rate first is the best bet, while others suggest starting with the smallest loans and working up to the bigger amounts.
Look for Extra Sources of Cash
Once you know what you’re working with, you can start looking for extra financial resources to help you pay back what you owe faster. Refinancing and adjusting your loans should ensure you have less to pay off in the long-term, but you’ll still need to think carefully about your monthly budget.
Sit down and look at your incoming and outgoing expenses each month. Where can you reduce your spending so you can push more of your money into your repayment plan? What can you do to increase your income? You might be able to sell some unwanted items around your home, or consider taking on an extra part-time job.
Take It One Step at a Time
As frustrating as it can feel to have multiple debts you need to deal with at once, it’s important to remember no one can handle various expenses all at the same time, unless they suddenly get a huge bonus. Instead of placing too much pressure on yourself, it’s worth slowing down and taking things one step at a time.
Create your plan for which items you’re going to deal with first, and check them off your list as you go. Remember to pay attention to the progress you’re making, even if it doesn’t feel huge straight away. Keeping track of your payments can be a great way to keep yourself feeling motivated when you get overwhelmed by your finances.
Stop Worrying About Money and Regain Control
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