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How to get out of debt fast

Hope the following tips can help you to be deft free in a faster pace.

1. Monthly Budget Plan
You need to fully understand your income and fixed expense every month in order to take charge of your own finance. Draw up simple table or chart stating your monthly budget which shows your monthly income and your monthly expenses.
List out all your fixed your expenses and income will help you to allocate your available income clearly and see what expenses can be trimmed.
You can start off by cutting down unnecessary spending like having a big feast, clubbing, shopping and others entertainment first.

2. Do a simple calculation now. Does your total loan or debt exceed 35% of your gross monthly income?
If you gross income is $2500/month, then your debt should not exceed $700/month.
If you gross income is $3000/month, then your debt should not exceed $1050/month.
If you gross income is $5000/month, then your debt should not exceed $1750/month.
If you gross income is $10,000/month, then your debt should not exceed $3500/month.

You should start off by aiming for less than 35% first.
Now, do a review on your debts and start off by clearing the debts with the highest interest rate first. You must avoid any late charges and penalty charges.

3. Once you have some extra money to spare, try to increase your repayment amounts. Increase your regular repayments or make lump sum repayments so that you can pay off your debt more quickly or make a lump sum repayment of your personal loan.

4. Credit Cards generate one of the highest interest rate. Pay off the debt with the highest interest charge first and never borrow from licensed moneylender to pay off your credit cards bills. Simply look at their interest rate charges and you will know the reason why.

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Hope some of the above basic tips can help you manage your personal finance well.

 

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