Debt repayment

A guide to conquering debts and taking back that happy life!

Debts are tedious, debts are frightening, and debts never want to leave your back.

You may try to end it by just making the normal payments, but you might also just end up spending more money on them and never quite eradicate the debt amounts fully.

The interest rate is the main factor that makes the debts so powerful. And for unsecured debts, the interest rates are bigger and more tough!

So many things to keep in mind, before you incur debts, yet only a small percentage of the population actually consider those dark aspects and take on debts.

This sweet post isn’t meant to scare you about debts.
Rather it is making easier for you to conquer debts and take back that happy life again, which you so much deserve.
You don’t want to forever remain in debts and deprive yourself of all the success stories this wonderful life has to offer you.
Hence, you are required to know the methods and steps discussed down here, for easy debt pay off tricks to save money on the debt payments, and eventually get more wealth stacked in to enjoy the vibrant future, that awaits you.

Knowing good debts and bad debts — unsecured debts and secured debts:

Debts have a very interesting usage in building this society or human civilization. They are not existing just like that. It is a requirement, that they be made available to us, for taking this mankind further.

Debt is a generosity, that you have to answer back to, with full respect and sincerity.
It is the act of lending and borrowing goods.

Suppose you want to start a business, that will surely benefit this whole society along with your success. But for starting this business or enterprise, you have to invest a big amount of wealth, which you don’t have currently.
So, what you do is you approach a financial institution, and ask for help.
They agree to give you financial help, but in return you have to pay them back not the amount originally owed, rather a bigger amount consisting an interest, an assumed sum, that the lended money could have gained the institution over time!

Debts are helpful, if you only take them up on good terms for good purposes, that count as beneficial.

This is what makes a stark difference between good debts and bad debts.

Those debts that are used to build wealth, affirm assets, and increase net worth, are considered as good debts.
Such debts include mortgages, appreciated car loans, other debts having underlying assets, student loans, and well utilized personal loans.

If you noticed, then you would have seen, that I have not mentioned credit cards, payday loans or those puny debts, under the good debts section!

That’s because bad debts don’t have any asset involved, carry high interest rates, and are mainly taken up as a result of splurging, or unnecessary expenditures.
And unfortunately, credit cards, payday loans, misused personal loans and all, fall under this category.

Therefore, before we discuss further, it’s important that from now on you clearly understand the difference between bad debts and good debts, and thereby act accordingly.

Moreover, this post will be centralized around bad debts and/or unsecured debts. For secured debts or good debts, you don’t need to rush in paying them off.
Often times they carry low interest rates, and don’t encourage pre-payments (as most of the mortgage lenders charge a prepayment penalty if a home loan is paid off too early).
Hence, if paying such loans off gets too difficult, then you should be taking your chances on loan modifications and refinancing, after having a thorough chat session with the lenders.

Now that you have understood the types of debt, we should take this post further!

Let’s discuss,
Your ways to conquer debts, and start living a happy life:

  1. Make efforts to save money on debts by consolidating them:

Out of the various ways you throw money away in the trash, making the consisting minimum payments on your unsecured debts is probably just one of them.

Like for instance, with multiple credit cards, it takes a lot of time to get rid of them, by just making the minimum payments. The cards have several penalty and late fees, and distinct high interest rates for each of them.

To address such a turmoil, you might be better off consolidating your multiple credit card debts into one place, and thereby have an average interest rate, with one single fat amount to pay off.

For consolidating several credit card debt, the best method is balance transfer. And, to do so, you have to take out a separate credit card for the same purpose, with a credit limit equal to the sum of your total outstanding balance on your existing credit cards.

Also, you should check, whether or not, you are getting an interest rate for this card, that is lower than or equal to the average interest rate of all your existing credit cards.

Once you have successfully transferred your balance into this new card, you can either close your old cards, or keep them open just for improving your credit history.

So that’s one example of debt consolidation, which you can use to pay off credit card debts. But, it is a Do It Yourself strategy.
If you want to consolidate payday loan debt, too much of credit card debt, personal loan debts, and are not confident in DIY steps, then you might need professional help with debt consolidation.

For that you will have to consult debt relief companies and work out your options.

2. Try debt settlement when you are unable to pay off debts in full:

Debt settlement has the power to reduce your overall debt amounts, and thereby help you to save a lot on the debt amounts.

But, settlement is not easy as consolidation. You can surely have talks with creditors to reduce your debt amounts, and also cut down extra fees, but it will not be as simple as it sounds.
You will have to send ‘offers of settlement’ to the creditors which will be signed by the creditors on the grounds of willingness. High chances are, they might even refuse to sign those letters.

If you are planning to settle your debts then make sure, that you consult a debt law firm, and in exchange for a small fee, get your work done professionally.

Settlement is undoubtedly one of the best options to solve your debt problems, if your aim is to save ample on the debt amounts. Nothing can beat this debt relief strategy, in this aspect! You can be sure about that.

3. Initiate some lifestyle changes and money habits:

Lifestyle problems are important to take note of, when you are dealing with debts! To keep in mind, it is you who has incurred these debt amounts, due to your own actions.

Therefore, you got to make use of some effortless ways to save money whenever you are getting the opportunity.

You can definitely start off by living frugal, and understanding the difference between needs and wants.
There are things that you wish to have, and there are things which are mandatory for you to have in order to live a happy life.

Get well notified about that!

Later you can expand your savings portfolio, make investments, take advantage of good debts, and reduce credit card usage, and so on!

Make sure, that once you pay off your debts fully, you should not indulge in taking up debts again.

The rest all is good! All the best wishes for a happy future.


Vlad graduated from National Technical University “Dnipro Polytechnic” in Ukraine. He joined PocketGuard in April 2021 as a customer support manager with strong communicative skills. Vlad is respons...

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