What is the best solution to pay off debt? Those who need to refresh their budget can immediately think about applying for a loan .
But, is this alternative always worth it? When to use this resource to pay off debts?
And more: is there any way to balance the budget without having money?
Come and find out!
How to pay off debts without having money?
The answer to that question lies in the financial organization. Those who need to settle debts often do not know their current financial situation in detail.
And without reliable control of expenditures and commitments already assumed, it is difficult to identify any opportunity to get out of this situation.
But with some simple tips you can control the budget. And, consequently, better prepare to pay off debts.
See what they are now:
- Make a spreadsheet or use an app to write down all your income, expenses and debts;
- Analyze which expenses can be cut for a while;
- Know your debts well: understand the deadlines, installment amounts, etc.;
- Separate debts into two categories: expensive and cheap;
- Identify which debts are subject to renegotiation : it is worth contacting the creditor to find out about all the discharge possibilities;
- Identify new income generation opportunities: with creativity, it is possible to find talent that can be monetized;
- Set realistic goals for paying off these debts: don’t try to overcommit your budget.
Which debt should I pay off first?
The overdraft and the credit card , for example, are types of credit in which the fees charged are very high.
To give you an idea, overdraft and credit card interest rates can exceed 300% per year!
This means that if you use 1,000 of the overdraft today, at the end of a year, you will have paid 4,000 thousand to the bank.
To escape these true “snowballs”, the best alternative is to prioritize the discharge of these debts first.
How to exchange expensive debts for cheap debts?
The concept of so-called “expensive” or “cheap” debts is to define debts that have a higher interest rate and higher Total Effective Cost (CET). It includes all charges charged such as taxes, insurance, tariffs, etc.
For example: as we have already seen, in the revolving credit card , the interest charge is quite high and increases exponentially every month.
If you are faced with this situation, it is worth analyzing the exchange of this debt for a personal loan, for example, since it has fixed and much lower interest rates.
In addition, opting for this alternative will bring more predictability in month-to-month payments.
But, stay tuned. Only after knowing the profile of your debts well is it easier to identify which ones can be exchanged in an advantageous way.
How to merge all debts into one?
The proposal to combine all debts into one can work well when there are many accumulated bills that need to be paid off at the same time.
Unifying them can help with financial organization, avoiding payment delays, as well as bringing relief to your pocket.
When is it worth taking a loan to pay off debts?
Before making this decision, the ideal is to evaluate some situations:
- To settle more expensive debts: such as overdraft or credit card;
- If you are going to pay debts in cash;
- clear the name ;
- Achieve better payment conditions;
- To simplify debt repayment.
How to get a personal loan to pay off debts?
The loan is always an alternative when the budget is tight. He can be a great relief to balance the bills, but he needs some care.
There are different types of loans . Personal loan is the most common of them.
As one of the most popular ways to earn money, it is considered to be quite affordable. It gives the customer freedom to do whatever they want with their money.
In this way, one of the ways to use the personal loan is to pay off debt.
But, it is important to emphasize that even if the personal loan is less bureaucratic, it goes through the approval of the credit analysis.
To apply for a personal loan, you must go to a bank or financial institution.
The bank will carry out a credit analysis. The process is quick, so you will soon have money in hand, if your profile is approved.
Some of the benefits of personal loans are:
- The payment period is quite wide, and can reach up to 48 months;
- The whole process: from the request to the release of the credit can be done online;
- The money goes directly into the checking account.
Pay off debts with payroll loan
The payroll loan is a good option for those who need money paying less interest.
This is because the debt portion is deducted directly from the salary or the INSS benefit. This represents a lower risk of default, which makes the institution that grants the credit more confident in receiving the debt.
If you receive a pension, are a pensioner or have a formal contract, you may be able to get a payroll loan to pay off debts.
Loan tips to pay off debt
The loan may be one of the first options that come to mind to pay off debt.
However, as good as the line of credit may seem, you must always be careful. Take a good look at your financial situation so you don’t get caught up in the budget.
Tips that can help settle debts more safely;
- If you decide to take out a loan, choose the option that best suits your situation and your repayment capacity;
- Pay attention to the amount of installments you are going to assume so as not to run the risk of getting lost;
- Get organized to pay the installments on time;
- Check if you already have pre-approved credit at your banking institution: this can bring you better credit offers;
- Keep your credit score high: doing this reduces the incidence of interest;
- During the time you are paying off your debts, avoid having your name negative : if you need to renegotiate, interest rates may be higher.