Get Out of Debt Calculator

Who wants to have debt? But there are times when debt is inevitable. Let's just say if an emergency such as hospital expenses or the cost of a child's education urges us to go into debt. Because no one can help, then debt becomes one way, but when debt has accumulated a lot, surely you want to be able to get out of the debt calculator.

Illustrative image (Picture: newcastle.gov.uk)

Indeed, it can be recognized that having debt is very easy, to pay it off which takes a long time.

Get Out of Debt In A Year

To be able to pay off the debt, various ways can be done. But the question is what is the best strategy to quickly pay off this debt?

Here are ways that can be used to quickly pay off debt, as follows:

1. Don't Create New Debt

Don't make things worse, not adding debt does not speed you out of debt.

But if we don't pay attention to this, it will be much harder to make progress in paying off debt.

Train yourself not to create new debt, by freezing credit cards or cutting off the credit cards you have.

2. How to Get Out of Debt, Build an Emergency Fund

An emergency fund is very important to have, especially if we are in debt. Because having an emergency fund can prevent us from creating more debt.

Having an emergency fund can prevent us from using credit cards as an emergency fund if there are emergency costs that suddenly appear.

Ideally, we prepare an emergency fund 6 to 12 times the cost of living.

Even if we have little in an emergency fund, it's better than relying on credit cards.

3. Negotiate interest rates with creditors

Many people can't settle debts because of their payments, charged monthly interest charges rather than their actual balance.

However, try to negotiate interest rates with your credit card issuer.

Creditors will provide policies by looking at existing transaction history.

If the payment during this time is smooth, negotiations to get a low-interest rate can likely be successful.

Be wary of the interest rate promotions that creditors often offer.

If you get a lower rate, try to pay it off as soon as possible to keep getting the low rate before the promotion ends.

Because, if the promo period ends, the credit card balance will be charged a higher interest.

4. Withdrawal of savings from pension funds or insurance policies owned

If your debt situation is very bad, maybe you have considered paying off the debt by withdrawing your pension.

However, you should understand that every retirement account has rules and may impose different penalties if we withdraw them not in time.

If so, you intend to pay your debt by taking a pension fund, then you should consider the penalty you will bear.

If the way to pay the debt you take is to take your retirement fund, then there is another effect, namely the retirement age may be longer and backward from the schedule that has been made.

There is another way to immediately get out of the debt trap, namely by taking from an insurance policy.

There may be little cash value already formed.

If we take these funds from your insurance policy funds, then the effect for you is that the insurance benefits themselves are reduced.

Or you cannot receive benefits that are by the terms of the policy.

So keep your consideration needed to take this step.

5. Consult Your Financial Planner

Debt problems often stress many people out. Not a few people ultimately decide to pay for the services of a financial planner to help them immediately get out of debt.

This gives us a clearer view of the financial problems faced and the way to achieve our financial goals is much clearer.

A financial planner exists who specializes in negotiating with your creditors.

Debt won't go away in an instant, but you may be able to pay off debt faster and lower interest rates.

Another point of having a financial planner is that they will provide direction as well as an alarm if there are new problems that we may not be aware of in terms of finances.

Hopefully this information about "get out of debt calculator" is useful.

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