Everyone is bound to have debts in their financial portfolio at some point in time. Whether you owe a few hundred dollars or have major, long-term loans to clear, debt management can be highly stressful. There’s always the risk of falling behind, particularly when you have multiple debts to handle at the same time. Moreover, too much debt may leave you juggling bills and struggling to find a clear path toward financial freedom. A bad credit score can make things worse because it hinders your borrowing prospects in case you need quick money for emergencies or have a debt consolidation plan in mind.
However, a few simple steps can make all the difference when it comes to taking control of your finances and getting them back on track, despite your debt burden. To start with, you can consider the option of guaranteed installment loans for bad credit direct lenders to manage your debts better and even get out of the fix. Before explaining more alternatives for dealing with your liabilities, let us explain these loans in detail because they will have you pretty much covered on the debt management front.
Guaranteed installment loans for bad credit are your best bet
A low credit score is a turn off for banks and traditional lenders because it indicates that you haven’t been great with the repayment of your loans before. Obviously, this doesn’t make you a reliable lending prospect for them. There are times when you may land into trouble, particularly when you require instant cash for managing your current debts. Not honouring the payments can hurt your credit score even more and you will end up with deeper trouble. Thankfully, online installment loans for bad credit can come to your rescue in such a situation. The best thing about online lending is that you practically have the guarantee of approval, regardless of your credit score. Here are some reasons why these loans make your best bet for handling your debt struggles.
Online installment loans are available with the easiest process as you can apply with only a few clicks. Find a credible website, fill up a few details in their application form and click to submit- and you are good to go. You don’t need to go through the cumbersome formalities of the conventional lending process, such as document submission and repeated visits to the lender office.
With this form of borrowing, you get access to money almost instantly. The amount comes into your account within a few days of getting approval, which makes it a great alternative when you wouldn’t want to wait for weeks and need funds without delay.
Installment loans online almost have guaranteed approval, regardless of your credit score. These lenders proceed to approve with soft credit checks rather than hard ones, so a low score doesn’t have to be a reason to worry. As long as you can show a good repayment capacity with a regular job and healthy checking account, you can expect approval without any hitches.
Installment loans are easy to pay back as you need to repay in small payments over several months. In fact, with online loans, there is the flexibility of discussing the payment terms with the lender and settling for an installment amount that you can manage comfortably. By paying these monthly amounts regularly, you can even use these loans to repair your credit score.
Another reason why these loans are ideal for debt management is that they give you the opportunity to consolidate your debts easily. You can take one lump sum loan online and clear off all the smaller debts. Effectively, you end up managing a single debt rather than multiple ones and you will be able to do it more easily.
Considering these benefits of installment loans, they come ahead as an amazing way to manage your debts. No matter how big or small the burden is, these loans can simplify things and prevent missing out on repayments.
Other effective debt management measures
Surely, online installment loans have you considerably sorted out on the debt management front, but there are some more smart measures you can embrace to handle them effectively. Combining them with installment loans can give you a foolproof plan that can never go wrong and may even get you out of the debt cycle. Here are some tactics you can implement.
Track your current debt burden
Making a list of all your debts, creditors and how much you owe to each person should be the starting point of your debt management plan. Also, keep track of the interest value and due dates of every single loan. While this could be a painful task, it gives you a realistic view of your financial circumstances and helps you in creating a viable repayment plan as well. Also, make sure that this isn’t a one-time task. Revisit the list periodically and update changes where applicable.
Create a budget
Apart from getting a realistic view of your finances, you also need a realistic plan to handle them. This requires a clear budget plan that considers the earning and spending so that you can squeeze out the repayment of debts regularly. Figuring out the monthly income and essential expenses would make you capable of saving as much as possible. Moreover, you will be able to take a balanced approach to clearing your existing debts and avoiding unnecessary ones ahead.
Never miss out on repayments
Time management goes hand-in-hand with debt management because timely repayments can save you from accumulating the extra expenses in the form of interest charges or late fees. Moreover, missing on payments can have a negative impact in your credit score, which is the last thing you would want to happen. Consider automating monthly debits from your account or setting up reminders to alert you when payments are due.
Prioritize repayment of your debts
The challenge of debt management gets bigger if you have many of them to handle at the same time. Setting priorities is the best thing to do as you would want to get rid of the ones with highest interest rates first. For example, clearing the credit card debt first is the smartest approach as it is often at a higher interest rate as compared to others. Alternatively, you may want to clear the one with the lowest balance first so you can limit the number of loans. Once again, your debt list would be of great help when you need to set your priorities.
Pay back extra when possible
A smart strategy to cut down your debt burden is by making extra repayments apart from your regular repayments, if and when it is possible. This tactic would help you clear the burden at a faster rate and you will surely end up saving on interest. In fact, you may save thousands of dollars by speeding up the repayment of your loans. However, it would be wise to check the loan terms before making extra repayments because some lenders may charge you for early paybacks.
Stick to at least a minimum payment
Paying back extra may not be everyone’s cup of tea but a good debt management plan revolves around at least sticking to the minimum payments. Even though the minimum payment may not translate into real progress in clearing your debt, every bit can make a difference. Additionally, it ensures good standing for your account, which helps you avoid late fees. Missing payments, on the other hand, makes it tougher to catch up and your accounts may even go into default eventually. So it is better to do as much as you can!
Have an emergency fund you can rely on
Unless you have access to hefty savings, you may end up falling into a debt trap because you may need to borrow for covering up emergency expenses. Conversely, even a small emergency fund can make a difference for managing your regular and extra expenses that come up time and again. Setting aside $1,000 is good enough to start a small emergency fund and you can keep adding up to it when possible. Ideally, you should consider building up a reserve that covers three to six months of your regular living expenses.
Recognize signs that you need help
At times, debt management may be too challenging and you can end up in a mess. It is important to recognize the signs that you need help in terms of debt relief. You can reach out to a credit counselling agency and consider options like debt consolidation, settlement and bankruptcy if things appear to be out of control. Each of these alternatives has its pros and cons and your advisor can guide you about the one that would be the best for your situation.
Although debt management may take a lot of work, every ounce of effort you invest is worthwhile. It has the potential to help you clear your burdens and fortify your finances in the long run. Moreover, you can be relaxed and stress-free about your loans and liabilities before they build up and go out of control.
Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.