Dealing with Huge Debt

Deal with your debt like a businessman deals with his business. There’s no other way for you to pay your debts that to source it out from revenues. If you’re an employee most likely you depend on your salary to pay your debt. If you’re a businessman, you pay your debt through the income of your business. The difference between the two is the source of income. The employee’s income no matter how much he worked and dedicate his time, the income he gets will always be the regular salary he has, while a businessman can choose to go higher through strategic planning and marketing of his operation. Now between the two individual, if you were a loan officer, who would you lend a big amount? If you are just a regular employee or worker and your salary is not enough to pay your loan, you would have to rely on another loan to suffice the payments. Because you have no other way on paying your current debt you resort on quick loans which have higher interest rates than the ones you have now. Your cycle of loan payments and loan applications resulted to higher interests which you pay more than the principal of your very first loan. This chain reaction of your debt activities balloons into a big amount which you can’t handle anymore, or so you think. But don’t be despair because the more you contemplate on this situation the greater of having your chance of solving it. The idea that you want this cycle to stop is a good action on your part, and you can start from there in order to deal your huge debt. So the next action can be trace through these concerted efforts made by people who achieve the financial freedom.

Deal with debt head-on. Meaning, you must accept the fact that you have huge debt and don’t deny the situation. Because the more you deny, the more you are inclined to get a loan without analyzing the impact to your cash flow.

It’s just a one plus one calculation. Choose from the many lists of debts you have that have higher interest and begin from it. Categorize your loan from a higher interest rate to a lower interest rate and from urgent to long term. If you have a monthly payments that is more than the income you have, find a way to outsource your payments from part time work. Total your re-payment source and allocate the big amount to a loan that has higher interest. The shorter term you pay for higher interest loan the lesser your total interest payments would be. After the payment period has ended from the higher interest loan you can focus the remaining to the most urgent loan payment. If still you can’t find a way to outsource an income, find a loan that has lower rate of interest and buy out your entire loan at hand. Meaning you apply a loan that has lower interest in order to pay off all your loans with higher interest rate to stop the ballooning of interest.

Debt is part of living. And don’t be ashamed that you have huge debt. It only means many financial institutions regard your character as credit worthiness. So don’t taint this personality and start dealing with payments of debt. The earlier you plan and pay, the fastest you can recover from this huge debt.