June 9, 2024

3 Ways to get out of debt

get out of debt

If you have a lot of debt and struggle to keep up with your monthly payments, you don’t have to handle the stress of counting your cents to survive. There are options available that could change the way you spend and save your money.

You’ll need to decide the best solution for your situation, which will depend on the type of debt you have, the total amount of debt and how much money you can pay towards eradicating that number.

Different debt solutions can affect your life in different ways. For example, they may affect your credit score, home loan or savings or restrict the work you are able to do. Make sure you understand how you’ll be affected before acting on one of the following solutions.

1. Debt Consolidation

Debt consolidation combines several loans, accounts, and debts into a single loan, often with a lower interest rate. It can reduce your borrowing costs but also has some potential drawbacks.

When you take out a new loan, your credit score could be negatively affected, affecting whether you qualify for new loans in the future.

2. Self-manage your debt

Self-management can be done in several ways to get out of debt. It starts with the following steps:

  1. List everything you owe.
  2. Determine how much you can pay each month.
  3. Reduce your interest rates.
  4. Use a debt repayment strategy.
  5. Be diligent moving forward.

Self-management requires self-discipline; one drawback is the lack of guidance from skilled advisors. You can get out of debt and save if you budget and plan, but this isn’t easy, especially when emergencies happen.

If you choose this option, remember: Always pay the minimum payments on your credit cards and loans, then allot any extra money to pay down more debt and save according to your goals.

3. Debt Review and Debt Counselling

The debt review process can seem complicated and daunting to some, but it is the first step to a debt-free life, with the associated benefit of peace of mind.

Debtline is a leading debt review specialist, allowing you to take advantage of expert financial advice and debt counselling. One of our NCR-registered debt counsellors will create a budget for you after careful assessment whilst avoiding being blacklisted.

You will also have your debt repayments negotiated, and multiple debt payments will be converted into one reduced monthly instalment. Debtline will ensure you regain control of your financial situation and have peace of mind.

There are some important factors to bear in mind when contemplating debt review.

  • You cannot apply for credit when under debt review, the aim being to reduce your debt, not increase it.
  • You will not be blacklisted while listed as undergoing debt review and cannot be contacted by creditors.
  • Your assets are safe from repossession if you make your debt review repayments, which are affordable and tailor-made to suit you.
  • Paying off debt with low but affordable repayments may take longer than planned, but it will make your life stress-free.
  • Debt review may be cancelled only under particular circumstances considering several factors. It is advisable to consult your debt counsellor before deciding on this step.

Contact us today and see why Debtline is South Africa’s most innovative debt management company.