Debt balance, payment notes and cases at Good Finance are a nightmare when you want to try to get the finances and life in order. The fact that the banks do not want to lend you money is one thing, but it will also be more difficult to get a rental right, to subscribe and to live a normal everyday life. Fortunately, there is always a way out, or even several. Debt financing can look a little different. hqreplicasbag.com for clarification
Shopping on credit and taking small loans is not free, it just feels that way. Before you know it you have ended up in the classic “luxury trap” – your income is not enough to cover all interest costs and the pile of debt collection is just growing. So how should you be able to pay off your debts without enough money? Here it is important to set up a sustainable strategy to become debt free. You have the following options:
Collect your loans
A common type of debt financing is to take out a mortgage loan. This means that you bake all your small loans and credits into a larger loan without increasing the total debt burden. If you have a very low credit rating, you may be required to find a co-applicant in order to successfully collect your loans.
It is also common that a two-step process is required before you have lowered the interest rate for your debt. Here’s how that process goes:
When you are in an economic crisis, it is important to solve the most urgent problem first and put an end to the negative spiral you end up in. This simply involves getting the private economy together.
In order to lower the monthly payment on your loans, you can collect them in one and the same loan even though at this stage you are unable to lower the interest rate due to your weak credit rating. If you choose to set up the repayment loan for a longer repayment period than your spread debt, you will be able to substantially reduce your monthly payment, which will make your personal financial situation sustainable in the short term. Obviously, an extended repayment period means a larger total cost for your loan because you pay interest over a longer period of time. But you will solve this problem in the next step:
As your small loans disappear and you manage your personal finances in the following months, your credit rating improves. Both of these factors weigh very heavily when it comes to your ability to negotiate good interest rates. In step 2, you renegotiate your mortgage loan with very good opportunities to lower interest rates substantially. At this stage, you can shorten the repayment period again and in combination with lower interest rates lower the total cost of your debt somewhat tremendously.
This multi-step process – which requires some patience – has proved very effective. Of course, you must have some kind of income or security for a negotiation to even get up to date. Also, do not forget that a co-applicant contributes greatly to both a larger loan amount and a lower interest rate.
Sell property or take out a mortgage loan
Do you own something of significant value? Sell it! We all have something we don’t need that someone else wants. Place your items on buy and sell sites or arrange a flea ice cream. It always generates more money than you think. Another option is to take out a mortgage loan, which means you borrow money from a mortgage bank with an item as collateral. If you cannot repay the debt, the mortgage bank takes the item and resells it. The mortgage bank receives a lot of items, so this is a pretty effective form of debt financing where you actually borrow from yourself. But, of course, a mortgage loan also costs money, so if you plan to mortgage something you still won’t redeem, you might as well put the item up for sale instead. However, the advantage of a mortgage loan is that you are guaranteed to get the money quickly.
Get help from a co-borrower
When you borrow money with a co-borrower, the banks look at your common finances. If your co-borrower has high income and the opportunity to get a bigger loan on good terms, this is perhaps the most convenient way to quickly settle your debts. At the same time, this type of debt financing requires the person to agree that you both are responsible for the loan, even if it is informally your loan.