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8 Steps to Get Out of Debt

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Paying all your debt at once can be a tough job. However, it certainly is not an impossible feat. When you make paying off your debts your priority, you must make sure that you do it completely and live a debt-free life.

For all those people who want to get out of debt in Canada, follow the 8 handy tips explained in this article and clear your debts before the due date. Have a look at these effective tips:

8 Steps to Get Out of Debt

1. Get to the Root

The very first step, get to know the problems and reasons that are causing late payments of the debt. Once you have identified the problems, you can move to the next step i.e. finding their solutions.

2. Know How Much Debt It Is

In order to pay your debts, you must first know how much debt you are having. This is an important step. Quite often, people make this mistake that they do not keep the track of how much debt they have paid or how much debt they have to pay. They just keep paying them off by giving a minimum amount every month. This what the banks/credit card/loan companies actually want. They will get a chance to increase the interest rate.

Once the interest rate is raised, it is almost like you have never paid any amount ever. So make sure that before start paying your debt, make a track and follow that. After tracking all your debts, you are going to make a promise to yourself that you will bring that number down.

It is important to know that paying off debts requires a lot of commitment. Avoid making minimum payments as you will be digging a hole for yourself, as we mentioned earlier.

We would recommend you use a debt consolidation loan calculator. There are numerous debt consolidation loan calculators available on the internet. All you have to do is enter your balance type, the amount you own, monthly payment and interest rate. It will generate the result and give the amount you are required to pay in order to be debt free faster.

3. Start from the Bigger Numbers

This is the part where you have set what is important to you. You have to decide where you are going to start. We would recommend you to start with a bigger number. It will help you in paying all your debts faster at lower interest rates.

4. Make a Budget

If you really want to pay all those debts off in a short amount of time then you have to be very organized. Form a budget and check if there is anything unnecessary that you have been doing lately.

Strike them off from your list and use things that you actually need. This will let you save money and you can pay off your debt in a shorter amount of time. Keep a track on what things you are spending your money on.

5. Kill All Your Temptations

In order to pay all your debt, you have to kill all your unnecessary desires and wishes that have no purpose in your life. We know that you feel happy when spending some cash on yourself but this is what will make things better. You have to stop using your credit card and start saving some money. If you can’t do that then give your credit card back to the bank. You can get a new one later when you are all debt free so don’t worry.

6. Try Selling Things Online

Just make a list of things that you think are useless like old furniture, clothes, accessories etc. Estimate their market price and arrange a price that you think reasonable and upload an advertisement for those products on different marketing websites. There are many people who will be willing to buy your things. Use this money to pay off your debts.

7. Make More Money

Once you have decided to pay off all those debts, you need to work hard then. Start doing over time so that you can get some extra cash from your job and use it to pay off all your debts.

8. Debt Consolidation Loan

Another option is to go for a debt consolidation loan. If you are wondering what is a debt consolidation loan? you can find your answer here. It means that you are taking out a new loan in order to pay other debts, usually the ones which are insecure.

How to Get a Debt Consolidation Loan?

You have to go through a procedure for that. At first, you have to apply for this loan from a private lender or a credit union, they will call you for an interview and ask you questions regarding your expenses. The application will be accepted after a thorough evaluation of the information you have provided them.

Debt Consolidation Loan, Canada can be a plan that is easy to access but you are bringing more financial problems to yourself. Make sure that you follow these steps so that you don’t need to face any further problems.


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