Did you know that 24 countries are now either in a debt crisis or at high risk of getting into one? And not just countries, the number of individuals getting into debt issues has also risen exponentially. Debt is a disease that is curable yet a lot of people seem to be caught in it way too bad. One of the most important steps in the treatment of any disease is the diagnosis. Unless you know you have it, you can’t cure it. Let’s identify the warning signs of debt and then eventually move to the steps towards debt consolidation-
Early Signs:
— Thinking About Debt-
Before you move on thinking that this is way too absurd. Here us out. When you borrow recklessly and are constantly consumed by worrisome thoughts of how you are going to repay them. This feeling of being unsure shows that you have a problem. But it is not too late. You can chalk out a plan and start working on your repayment immediately.
— Using A Credit Card To Pay For Essentials-
You should view your credit card as a means of spending during emergency and avail offers and discount. Not as a means to pay for your necessities. When you start paying for your essentials through your credit card, a debt problem is not too far behind.
— You Can’t Keep Track Of Who You Owe-
“Hey, can you lend me some money? I’ll return it to you as soon as my salary hits the account.” Have you been saying this a lot lately and the only thing you don’t remember is who did you say it to? You definitely are going to caught in the debt trap. Better work on your debt consolidation soon before it gets out of hand.
— You Have Stopped Saving-
Earlier, you used to have at least some amount of savings in your bank account. But lately, all you do is spend? Or maybe pay back the money you had borrowed earlier but no savings at all. A debt problem is arising and you need to fight it soon.
— Hiding Your Debt Problem-
Your parents, spouse or friends might try and hold an intervention for your irresponsible spending and incessant demands of borrowing money. Is that why you have started making purchases on your credit card, borrowing money from people outside your immediate circle and hiding it from the close ones? If this is true, you definitely to be doing something about your debt.
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Serious Symptoms:
— Having Debt Across Many Sources-
Multiple credit card debt plus you have a personal loan? Are you in too many debts simultaneously? Having debts across too many sources is a sure sign that you have a debt problem.
— Borrowing Debt To Pay Off Other Debt-
If you feel you have been hopping from one loan to the other or been borrowing, again and again, to pay off debt, you really need to work on your debt problems. This will be a vicious cycle of borrowing and repayment unless you do something about it seriously.
— Your Debt Grows Each Month-
Every month when you receive your salary, you must be making bill payments. Do you feel that every month when you are done making these payments, you are left with less money than you had last month? If this is true, your debt problem is growing.
— You Start Missing Payments-
Is your credit card bill is due? You missed your EMI payment. Or you could just not repay the loan you took from a friend. Do any of these situations sound familiar? If you nod yes, you are in a debt problem.
— Debt Collectors Are Calling-
It can not get easier than this. If you have received a call from the debt collecting agency, you definitely are in debt problem. You don’t have to work on your debt problem now, you are in dire need of help from someone.
Steps to Debt Consolidation:
— Identify The Root Of The Problem
The first step towards consolidating your debt is fairly difficult- Acknowledge that you have a debt problem. Most people try and avoid the situation rather than facing it head-on. Until you do that, you can not move ahead with solving the problem at hand.
— Research Your Options
Once you have discovered what makes up your debt problem, research your options. What can be done in such a situation:
Talk to Your Lenders: Did you know that a lot of lenders offer hardship programmes? If you can not pay your debt for some time, talk to your creditors. They can chalk out a plan for you.
One by one or All in one: Decide which debts to pay off first. You can start with the smaller ones or you can choose to wrap all your debts in one.
Personal Loan: You can go for a personal loan and pay off all your debt in one go. Now you can start adopting healthy spending habits and pay off this debt on time, properly.
Switch it up: It is never too late to get a balance transfer. You can switch your credit card debt or your loan debt to loans with lesser interest rates.
— Make A Plan
Better late than never. Start making a budget for your week, month and year. Make a full proof plan to save a considerable amount of money so that the next time you need money for emergencies, you do not face a hard time.
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Fortunately, a cure is available. The best part is that most of the treatment depends on you. The day you decide that you want to be cured and spend each waking moment in its direction, it is not insurmountable. If you need any help in the process, do let us know in the comments below. Until next time!
