When we have debt, indirectly we will face the problem of worries that will surely plague us. Don’t let these debts continue to overwhelm you and there is definitely a way to pay off those debts.
1. Pay the Highest Debt First
If you have a certain amount of money and have the choice of whether to keep the money in a savings account or invest or pay off debt, choose to pay off debt. The more debt we have, the faster we have to settle.
Even if you only have to pay off one debt, priority should be given. This is because the interest rate you have to pay for the debt will affect your finances compared to the return you get from saving in a savings account.
For example, if you have RM5,000 and use it to repay loan debt, you can save RM600. This is because if you save the money with an interest rate of 6%, you will only get RM300.
So it is better that you use the money to settle the debt than to deceive yourself that you have RM5,000 in savings, even if you have debts that need to be settled.
2. Pay More Than Minimum
To your knowledge, a credit card is also a type of loan. To use it properly, make sure you can afford to pay more than the minimum payment.
It is best to use credit cards only when needed. Other than that, make sure you can afford to pay in full as soon as you receive your monthly credit card statement.
3. Temporarily Stop Using Credit Cards
There are many bankruptcies among young people under the age of 30 who have accumulated credit card debt. Therefore, be mindful before being hit.
While you are busy paying off your debts, reduce or stop using credit cards temporarily. Credit cards are also a type of loan, so why add more commitment when the existing financial commitment is still a lot?
If you can't afford to limit the use of credit cards, it is better to stop using credit cards until you have settled other debts. This is because credit card interest rates are among the highest compared to personal loan debt, car debt or home debt.
4. Increase Income
One way to pay off debt faster is to increase income. Usually, what comes to mind is to find a job with a higher salary.
However, it is not easy to do. If you can’t afford to find a job with a higher salary, you can start creating part -time jobs.
By working part -time, it is more flexible. Choices can be made to determine the type of work as well as the time to work. There are also jobs that can be done at home without us having to go out anywhere.
This way, the debt will be faster and easier to settle.
