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Being Dept Free?, Here Its Tips

# Work out the amount you owe

With home loans, Mastercards and credits all piece of ordinary cutting edge life, it can be difficult to monitor what you owe. Be that as it may, you can’t work out how handle your obligations until you know the sort of aggregate you have to pay off.

Take a seat and make a rundown of the considerable number of banks and different loan specialists you owe cash to (aside from your home loan moneylender). The aggregate figure may be somewhat of a stun, however this is the total that you have to manage on the off chance that you need to be without obligation and it’s the main place to begin.

# Consolidate your debts

Once you know how much unsecured debt – which includes credit cards, store cards, personal loans and overdrafts – you have, the next step is to work out how much interest you are paying on those debts.

For example, you might have a personal loan at an Annual Percentage Rate (APR) of 7%, an arranged overdraft at 18% and two credit cards, one at 15% and one at 18%.

However your debt burden is comprised, you will find it a lot easier to manage if you move the total to one place – and, if you choose this place wisely – a lot cheaper too.

# Slash your interest charges

The right new home for your debt will depend on how much you have and where it’s held. If you owe £5,000 on a credit card for example, then a 0% balance transfer credit card will mean you stop paying interest on that debt altogether. In other words, your repayments will be used solely to pay off your capital balance.

Borrowers with good credit scores can currently get up to 29 months interest-free withBarclaycard’s Platinum Extended Balance Transfer Credit Card (subject to a fee of 2.79% of the debt being transferred) or 15 months at 0% with the Halifax All in One Card, which charges a fee of just 0.8%.

If, on the other hand, you owe into double digits across a range of borrowing, one low-rate personal loan could be the best option. Not only do personal loans generally allow you to borrow larger amounts, they also come with a fixed repayment plan that will help less organised borrowers get back on track.

The good news is, the cost of personal loans is at rock bottom at the moment – especially on medium-sized borrowing of between £7,500 and £15,000.

# Talk to your lender(s)

If you are already at the stage where you have been forced to miss payments because your debt burden is too heavy, the best advice is to seize the day.

If, for example, you are worried about meeting your mortgage payment (which, alongside rent payments, should always be your first priority), a phone call to your mortgage lender could be the start to the solution.

For example, your lender may agree to extend the term of the loan which will reduce your monthly payments, temporarily move you onto an interest-only deal, or even give you a payment holiday while you get back on your feet. It will be much less sympathetic if you only get in touch after you have started missing payments.

# Seek free debt advice

Switching to cheaper deals or talking to lenders is all very well. But for people with real debt problems, it could be too little, too late.

Even if your debts are really getting on top of you, though, it’s never too late to take action.

Contact a free debt advice charity such as StepChange which will help you decide the best way out. This could be anything from a Debt Management Plan to an Individual Voluntary Arrangement (IVA) or even filing for bankruptcy.

But at least your road to financial recovery will have started.