If you have a lot of debts and feel like you should be repaying it, then you may need a good plan. Deciding to repay is a really important step and so the fact that you have done this is fantastic. However, it is also important to make sure that you are able to find a good method to repay the debt. This could be done in lots of ways, but below is a step by step method which cold be handy.
Note Down all Debts and Decide What Ordre to Repay Them
The first step is to identify each of the debts you have and think about which order to repay them. This can be a bit scary, when you calculate how much you owe, but remember that you will be able to repay it off. Also make sure that you do not include student loans because it will only be in rare circumstances that you will benefit form paying these off early. So, unless you are a very high earner, have been since you graduated and expect to be until thirty years have passed since you graduated then ignore the student loan. Deciding on the order to repay your loan can be tricky. However, there are different choices that you can make. For example, you can choose to pay off the most expensive first as that will save you more money, you can pick the one that is the smallest so that you can quickly eliminate it or you might have a particular loan which you just want to get rid of first.
Start Overpaying One and Keep Repaying Others
Once you have chosen which loan you want to repay first, you can concentrate on this one. Even if it is only a loan for the short term. The first thing you should do though, is to make sure that you are covering the payments you have to make on every loan. You will need to continue paying those essential payments all of the time or else you will get fees and charges from those lenders. Then you need to take a close look at the terms of the loan and check whether you can make early repayments. Sometimes there is fee for doing this and it can be quite a lot, so it is good to check as you may even find that it is cheaper not to repay the loan early. It can be wise to call the lender and ask them about this first if you are not sure or cannot see any reference to this in the terms and conditions.
Think of Ways to Repay More
Once you have got on board with the idea of repaying early, which loan you are concentrating on etc then you need to start making the extra payments. If you have savings, then you can start with using them. If you normally have money left at the end of the month, then you can use some of that. However, you may not have these and even if you do, you may need additional ways to repay the loan. It could therefore be worth thinking about whether you can perhaps spend less. You might be able to buy less things or pay less for the things that you do buy to save money. You may also be able to think of some ways that you can earn more money which might be really helpful too. You may even be able to sell some things you do not need to make a bit more. There will be a lot of potential things that you can do but it will just be a case of making sure that you keep focussed on your goal and use extra money to repay the loan so that you can get it repaid quickly.