Loans have long and firmly entered our lives. Using borrowed funds, we can already afford to buy an apartment, a car, household appliances, pay for tuition and get access to many other things for which we are not able to quickly accumulate the required amount. But sometimes the loan turns into an overwhelming burden. Say, what if a stable source of income is lost, and loan payments are piling up? Is it possible to get out of the debt hole?
Instructions
Step 1
If you are unable to pay off your loan obligations, do not let the solution of this issue take its course, but quickly assess your financial situation. By stopping payments to repay a debt to a credit institution, you put yourself in a difficult position. First of all, late payments will ruin your credit history. Therefore, try to react to changes in your financial situation immediately, without hoping that everything will be resolved by itself.
Step 2
Contact the bank or other lender who provided you with the loan, and notify him of the impossibility of repaying the debt on time. In this case, there is a chance to negotiate a loan restructuring.
Step 3
Carefully consider the options offered by the lender. The bank will gladly put you on a trick called "minimum payments". By paying the minimum amount of debt, you can pay off your debt throughout your life. So, if your loan is $ 10,000, it may take you several decades to pay off the debt with minimal payments, while the total amount of payments may be twice the original amount.
Step 4
If the total amount of your debts is large, pay off the largest ones first. Refuse the temptation to reduce the amount of debt by paying off the smallest ones.
Step 5
Identify those debts and loans that have the highest interest rates and focus on paying them off. This will allow you to reduce the burden on your personal budget in the long run.
Step 6
Don't make the common mistake of trying to get new loans to pay off old financial obligations. This, of course, will allow you to breathe freely and reassure the main creditors for a while, but given the prospect, such a decision will lead to the fact that you will sink even deeper into debt.
Step 7
Try to reduce your current consumer spending, give up the temptation to buy one or another thing, seemingly necessary in the household. Start keeping a log of income and expenses, this will allow you to better control your financial flows, no matter how modest they may be.
