July 26, 2023
- Olsen Breet
- February 4, 2020
Multiple financial obligations are always a concern for many of you. After all, money is the critical fuel to survive in the materialistic world, and its exhaustion can be a matter of worry for anyone. It isn’t straightforward to see your hard-earned income drain away. The most frequent message on your mobile becomes the one that notifies you about the debit of varied repayments. Yes, that isn’t very comforting.
Debts are a vital part of our life, and it is not very easy to avoid them. For some or other reason, you have to exploit financial opportunities to feed future progress. That shifts specific commitments on your shoulders in exchange — for example, loan instalment, credit card payments, bills, insurance payments etc.
The chaos starts when all debts gather to become huge, and your income feels inferior. For sure, that is the moment when you should start working on preventive measures.
Seek the idol debt-to-income ratio
In search of worldly desires, you do not even realise when you lose attention from the actual financial peace. Home loan, car loan, credit card, cable bill, personal loan, etc. etc. etc. all come to existence to serve your purposes.
The moment you forget your affordability limits, the expenses or debts start dominating. Seek for the actual balance between your outgoings and income. With a firm control on this aspect, you can change the game.
There are two idol ratios – 60:40, 70:30. If you attain and maintain any of these two, you can make the debts debit a smaller amount in totality.
Stop taking rollovers
You missed to pay off a debt on time, and as a remedy, you took roll over to get more time. But every time you do that, a fee and a rise in interest rate add that the finance company may apply. This only worsens the situation of continuing fiscal commitments. It keeps adding in your obligation bucket, and after a time, the circumstances become complicated.
Every time you take a rollover, two negative situations emerge –
1) The added burden of the increased cost of rollover fee/charge/penalty etc. Rate of interest on instalments may also go high.
2) The extended tenure is helpful, but it even starts another journey of repayments. This inaugurates another long duration of suffocation in your monthly budget.
The above two situations are certainly not very helpful for your finances. To avoid them, it is necessary to tackle the instalments without any delay or failure.
If finances are unbearably scattered go for debt consolidation
Excess of everything is terrible! In case the personal finances are over-burdened with obligations, and no change in your financial habits can work, find a revival tool. Delay can be deadly, and it is better to make the required decisions at the right time.
Debt consolidation loans can play the role of that tool with the following perks they bring.
- All loans and debts turn into one big loan
- In place of many instalments, you pay only one
- The varied interest rates change into one fixed rate
With the advancement in lending policies, the new age practices have made their space. The online financial services that are flexible in approach provide the support irrespective of credit score status.
The new approach gave birth to unprecedented lending products like debt consolidation loans for bad credit in the UK. Technically the people with poor credit scores are more in need of such loan choices than anyone else because their credit records need support.
It not only controls the number of debits from your salary account but also shrinks the amount. This should undoubtedly sound like a great deal.
Make the credit card useless frequent
The undisciplined use of credit card is one of the major factors of increased outgoing of income for debts. It is never advisable to take out your credit card for every small purpose. Buying an ice-cream, handbag, t-shirt, going to an amusement park, or whatsoever, not for everything you can use it.
The rate of interest on a credit card is always high (as you know) and the instalments multiply in significant numbers. To avoid the overuse, make sure that you keep it restricted for purposes that are seldom. Big purchases, once in a while shopping of a big lot, monthly grocery shopping etc. For the expenses that happen daily and are small in size, it is better to do cash transactions.
The above suggestions are practical as they relate to your daily routine financial habits that leave a short-term and long-term effect. Embrace them, and you can see less number of debit messages on your mobile. ALL THE BEST FOR YOUR EFFORTS.
Olsen Breet is our in-house Financial Expert at EasyPolicyLoans, with more than a decade of writing for various finance companies in the UK. He has got this knack for turning even the trickiest money matters into something we can get our heads around. Before he started sharing his wisdom here, Olsen was playing with big numbers and advising on loans at a bank. He graduated from University of Glasgow, grabbing a finance degree before jumping into the deep end of the financial pool. Olsen’s our go-to guy for making sense of market trends and is always ahead of the curve.