Get your debt under control before it controls you

One of the less pleasant topics that crop up when we talk about money is debt. The subject creates anxiety for a lot of people, and those people might agree that it is a topic that is best avoided. Debt has the power to ruin livelihoods and put dreams on hold. Unfortunately, for many of us, it is something that we have to deal with. And it does not go away until you deal with it. 

A key part of getting your debt under control is setting up a budget to close off outstanding payments. The other part involves mentally preparing yourself for the challenge of confronting debt. In this blog post, we'll look at how you can start this process.

Acknowledge the problem

The first step on your journey to a debt-free life is the hardest: facing your debt. Start with a spreadsheet and list all outstanding payments, interest rates, costs, and income. This is a good way for you to see how your finances fare currently.

Strategise

Now that you have a clear view of all your debts, it's time to start planning how you will pay them off.

Some people recommend starting with the smallest payments and gradually paying off larger sums. Others recommend starting to pay off the debt that has the highest interest rate. To help you decide, have a look at which method will motivate you to pay faster. You can also consider current interest rates.

Consider consolidating your debt

Consider taking out a consolidation loan if you have various debts that need to be paid off. It's a safe and reliable way to simplify your debt and ensure that it is paid off once and for all. You can also choose how many loans you want to consolidate, depending on your financial situation. For example, at African Bank, you can consolidate up to five loans, of up to R250 000.

Check your credit report

Stay ahead of the game – make sure you know what lenders will see on your credit history by checking your credit report. You should check your credit report regularly to detect signs of fraudulent activity in your account. In fact, you should begin checking your credit report regularly in the future.  It's a financially beneficial habit that will fit in well with your new debt-free life! You can get your credit report for free here.

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