How to Live with Long-Term Debt

Sometimes, life puts you in an uncomfortable situation which you have to endure for quite the long time. And while it might seem like there’s no end in sight and you fear that you might be stuck like that forever, don’t despair – things are often far from that bad. You just have to come to terms with the fact that you’ll be living your life in a more limited manner for some time, but keep your eye on the prize at all times. As long as you’re persistent, you’ll be able to climb out sooner or later.

You can do quite a lot to make the whole process easier and less painful though. Instead of seeing this as a bad situation that makes you feel depressed, you should treat it as an opportunity to get your life in order, and to learn some good financial habits. Because there’s definitely a lot one can learn about handling money these days.

Have a Plan for Getting Out

It all starts with a plan. No matter how big your debt is, there’s always a way to get it off your shoulders eventually. You just need to know what steps you’re going to take, and follow them diligently. Make a table of your current financial situation, and try to account for anything that you expect to happen in the near future. Things like job promotions, moving places, selling property and others that will have a major impact on your finances should be noted down.

By planning your life around these events, you can take advantage of each of them to its full potential, and ensure that you’re one step closer to being debt-free in the end. Of course, not everything that happens in your life can be planned for, but there’s a good number of events that can be considered in advance.

Stick to Your Budget

Making a plan is one thing, but actually sticking to it is another story, and it’s also the point where many people tend to start moving in the wrong direction. You might be feeling enthusiastic and motivated after seeing your plan in front of you. The realization that you actually do have a way out can be very liberating, and it can prompt you to become more careless with your money in the future.

This is definitely not the time for that though. Right now, you need to focus on following your plan down to the last point. If you discover that you’ve miscalculated something in your favour, don’t treat it as free money – use it towards fixing your debt situation instead. It’s one extra drop in the bucket that will set you free!

Take Advantage of Every Opportunity

Little savings can add up quite fast, and this is especially true when you’re trying to save up some extra money to pay off your loans faster. You should try to seize every opportunity you get to save a little extra, even if it might not seem like much. You’ll be thanking yourself later on. And once you start thinking about this more actively, you’ll probably start to notice such opportunities all around you.

From cutting certain costs in your daily eating habits, to changing your traveling schedule, and more. There are tons of things the average person could do to ensure that they spend less and save more. The reason most people never get around to these things in the first place is because they don’t feel hard-pressed to do so.

Maintain a Support Network

Taking care of debt means that you’ll be going through a tough period in your life. And this, in turn, means that you should do your best to ensure that you have people you can rely on. Let your friends and family know what you’re dealing with. You don’t have to immediately fall back on them – quite the opposite, in fact. You should do your best to stand up on your own two feet. But when one day something goes wrong and you realize you’ve miscalculated a payment, it’s nice to know that someone can lend you a hand.

Of course, try not to overuse this kind of support. There’s nothing worse than ruining a good relationship over an issue with money, and unfortunately this tends to happen quite a lot to many people these days. Being responsible about your situation is the first and most important step towards avoiding this.

Always keep your eyes firmly fixed on your ultimate goal, and you should be able to get out of this situation just fine. There’s a lot to learn from having to live with large amounts of debt, and once you’ve cleared it up, you’ll find yourself charged with a fresh new attitude for dealing with your other problems.

How to Get the Best Deal on a Personal Loan

Looking to get a personal loan to cover some expenses? That’s never a bad idea, provided that you know exactly what you’re getting yourself into. The loan market is quite dynamic, and the deals you see available today might look very different tomorrow. This makes it important to do regular research, so that you’ll know roughly where to look when the time comes to take out your loan.

There are several factors to keep in mind when scouting the market, and you should try to set aside as much time as you can for this if you want to maximize your chances. Of course, it’s not always possible to plan ahead for something like this, but if you can afford to take a more patient approach to it, it’s definitely worth it.

How Much Time Do You Have?

And that’s the first important point you’ll have to consider. The amount of time you have available – both for searching for a deal as well as for repaying the loan – is one of the most critical factors you’ll need to account for in your search. Try to talk to lenders as early as possible, so that you’ll have a set of deals readily available later on. This can improve your position in negotiations significantly.

Generally, taking a few days – or even a week – to do your research is a good idea if you want to get the best deals you have access to. If you have to take out a loan on very short notice – like on the same day or something close to that – you should be prepared to deal with uncomfortable conditions, such as high interest rates.

Improving Your Credit Score

If you have even longer to prepare, you should use that time to improve your credit score. This is not an easy process and can be very time-consuming on top of that. You should pull up your report and find out what your credit history looks like, and start working from the top down. That is, try to sort out the biggest issues on the list which can have the strongest potential impact on your credit score. You have limited time to get this done, so you should make the most of it.

It’s not rare to find errors on your credit report as well. This happens, and it’s a completely normal part of the process – so don’t be alarmed if you see anything unusual. Call up the corresponding company and/or the reporting agency, and get the issue sorted out. Remember that it can take some time before these fixes are reflected on your credit report, which might put you in a tricky spot if you need to get your hands on your loan before that.

Talk to the Lender

We mentioned negotiating above – and it’s something you should not ignore as an option in any case. Most lenders can be surprisingly open to discussing their terms with you, even if you’re in a less favourable condition at the moment – such as having a low credit score. As long as you have some reasonable arguments, and can show that you’ve done your research and are familiar with the market, that’s all that matters.

If you’ve recently done any work to fix your credit score, it might not be a bad idea to bring that up with the lenders in those negotiations. It will reflect positively on your profile, and might make you look like a more favourable candidate.

Work with the Same Lender

Lenders like security. That’s why people with bad credit scores get such bad conditions to begin with. A lender must make sure that they’ll be able to compensate for any people who default on their loans when working with less favourable borrowers. This also means that familiarity is something that can work in your favour, and you should do your best to take advantage of that. If you’ve borrowed money before, try to work with the same lenders again.

Since they already know you, they’ll know exactly who they’re dealing with, and will be more likely to give you better conditions without having to negotiate them over and over again. In fact, some lenders might even give you preferential treatment as a returning customer, although try not to get into that situation in the first place – unless you need those loans for a calculated reason, like investing into your business.

And if you want to build some rapport with a lender initially, you can take out a secured loan. As long as you’re confident in your ability to get it paid off, it can allow you to borrow at better conditions, and therefore repay the debt more easily and show that you’re a reliable borrower.