5 key ways to help you get out of debt
- Work out a payment plan
- Consider the snowball method
- Look into debt consolidation
- Use any windfalls for debt payments
- Stop using your credit cards
- How Koyo Loans can help you manage your debt
Statistics show that the average household debt in the UK is £63,528. Debt can be debilitating and can inhibit your lifestyle, particularly if you don’t keep on top of your monthly repayments. So, with that in mind, here are five key ways that will help you get out of debt more quickly, enabling you to live more freely.
Work out a payment plan
First and foremost, you need to know exactly how much money you owe, including interest. Add up all of your debts and keep track of them in a spreadsheet each month, and this will help you take back control from the very start. Once you know how much you owe, you need to work out a payment plan. While it’s tempting to make the minimum payment each month, doing so doesn’t actually eat away at the debt. So, even if it’s just an extra £50 per month, make sure you commit to a payment plan that works away at your debt each month.
Consider the snowball method
The debt snowball method can be an effective way to get out of debt. Let’s say you have three outstanding forms of credit:
- £1,500 on a car loan
- £4,000 on a credit card
- £6,000 on a student loan
When you’re faced with paying off £11,500 worth of debt in one go, it can seem insurmountable. But the debt snowball method necessitates that you pay off the smallest debt first while making the minimum payments on the other forms of credit. So, you would pay off as much money as possible on the £1,500 car loan before moving to the credit card, and so on. The snowball method helps you to stay on track and focus on one debt at a time, which can be helpful for your morale.
Look into debt consolidation
If you have multiple forms of credit outstanding, debt consolidation could be a viable option for you. Debt consolidation is the practice of applying for further credit to clear your current debts. Once you have the funds, you pay all of your outstanding bills off in one go, and then make payment to the one creditor.
You can take out an unsecured personal loan for debt consolidation, and when done correctly, it can save you hassle and money each month. At Koyo Loans, we offer unsecured personal loans of amounts between £1,500 and £12,000. 24.9% APR Representative. Find out more about how debt consolidation can help you if you’re servicing multiple forms of debt simultaneously. You should only apply for credit if you can comfortably afford the repayments, all loans are subject to our terms.
Use any windfalls for debt payments
Should you receive a tax rebate or any other form of unexpected cash, commit it to paying off your debts. While it can be tempting to use the money to go on holiday or buy a new car, you need to be disciplined if you want to get out of debt more quickly. The same is true for inheritances and work bonuses – if you come into any money throughout the year, use it to pay off your debts more quickly.
Stop using your credit cards
Credit cards are expensive, and if you’re trying to get out of debt, they will make things more difficult. While you don’t need to cut your credit cards in half, it’s a good idea to remove them from your wallet or purse, so you’re not tempted to use them when you’re out and about. You might have to cut back on your expenditure, but no longer using your credit cards will help you get out of debt more quickly.
How Koyo Loans can help you manage your debt
At Koyo Loans, we offer unsecured personal loans of between £1,500 and £12,000 that can be used for debt consolidation. 24.9% APR Representative. Although debt consolidation isn’t a viable option for everyone, it can help you save money on your debt repayments. Use our loan calculator to see how much you could borrow and decide if debt consolidation is a good strategy for you. All loans are subject to our terms, you should only apply for a loan if you are able to meet the monthly repayments over the duration of the loan term. For more information regarding our loans terms and conditions, our loan application and whether or not a certain loan is right for you, take a look at our FAQ page.
Koyo Loans is the trading name of BETR Technology Ltd. Company No. 11483187. Registered Office: Huckletree Soho, Ingestre Court, Ingestre Place, London, W1f 0JL
September, 30, 2022