Climb Your Debt Mountain One Step at a Time

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Climb Your Debt Mountain One Step at a Time

Most people will train for years before attempting to climb Mt. Everest or any other massive mountains. Climbing a mountain is not something that can be done if you lack the willpower and strength to train and eventually finish the journey.

The same goes for your debt mountain, which depending on your circumstances may look just as challenging and daunting as the highest peak in the world.

However, with consistent effort, you will certainly climb your debt mountain. Remember, the key is consistent effort and not a one-time event. You need to keep in mind that you cannot expect to get the results that you want if you regress to old bad habits.

Here are a few tips that will keep you away from falling into debt again:

Check your credit report

Similar to how one cannot climb a mountain without a guide or a map, you need your credit report to tell you your financial situation and how to proceed.

With your credit report, you can start planning your financial goals once you know your current situation. For example, if you are still facing a large sum of debt, your goal should be to pay off those debts first before you start saving.

Create a plan

Once you have studied your credit report, create a plan to remedy the situation. You can either do this alone or seek the help of an expert.

Below are a few things you must keep in mind:

  1. Defaulting is not a great idea

When you default on a loan, you will be blacklisted for many years. That will mean that you will never be able to get a loan from a bank or a financial institution in future. Therefore, do not ever consider defaulting on a loan unless it is your very last option.

  1. Check if you can request for debt consolidation

Debt consolidation is exactly what the name implies. It involves taking one big loan to pay off all the existing loans. Typically this big loan has a lower interest rate than other loans, allowing you to pay less in total. Another advantage is that you will only have to worry about only one loan instead of being continually frustrated over some loans.

You should first check to see if you qualify for a debt consolidation loan or not. Depending on your credit history and current salary, your bank or credit card company may or may not offer you a debt consolidation loan.

  1. Show the right intent and attitude to creditors

Stay in touch with your creditors, especially if you have some outstanding loans. Show them that you intend to pay them back as quickly as possible. Legal money lenders in Singapore will usually be amicable if you are consistent with your repayments. At the same time, replan your budget so that you can keep up with your repayments. If required, cut corners to stay on track with your repayments. Finally, you should avoid taking more loans because that will only land you in greater debt.