When large debts are incurred, there is often a kind of negative spiral in the economy. The more money that is missing each month, the greater the need to borrow new money to cover the money shortage, and so you get more debts and higher costs that make you in a worse situation. If you have large debts that cost a lot of money each month, you need a solution, but that is not to borrow more money. It is not easy to get out of debt but it is not impossible.
Reinforce your own finances
Do you have debts that cost unnecessarily much money each month and feel that it is difficult to get the economy going, but that you still manage to do just that? In that case, it is not too late to settle your debts and get out of their financial problems. In this case, you can try to make your own finances of your own finances and work your way out of debt. However, it may take time.
The idea of a personal debt restructuring is to organize your finances yourself by systematically getting rid of your expensive debts. It requires making some sacrifices and working hard, but it is a solution that many who have debts must try.
Keep track of your finances
The first thing to do is to keep track of your own finances. You need a budget estimate that shows exactly how much money disappears each month in bills, installments on debts, food money and everything else that you spend money on. You should then also write down exactly how much money comes in each month so that you know how much money you have to work with. If you realize that you go back every month, it is even more important to take it all in.
The next step is to look for things to save money on. There are many good savings tips that cover everything from saving food to insurance to car costs or anything else. Everything you can save on is good. It can be eating cheaper or taking the bike to work or finding a cheaper electricity contract or terminating TV channels that are unnecessarily expensive. The more you can save each month, the better.
Keep track of your debts
Make a list of all the loans and credits you have and rank them by the most expensive each month. The loan that has a maximum monthly cost should be paid off first. If you have a very small loan that can be paid off directly and fully redeemed, you may want to do this first of all.
Make sure to make only the smallest possible repayment on all other debts you have so that you get as much money over the month as is possible. If you talk to the lenders you might be able to get a deal on smaller payments or similar. This can give you some extra breathing space and save you.
Start with the most expensive loan
What you want to do is get rid of one loan at a time until all loans and credits are gone. The most expensive monthly loan should be addressed first. Any extra money that you have received by saving on all unnecessary and by looking over your finances is added to an extra payment on this particular loan.
If you have something of greater value that you can sell, such as a car or an unnecessary TV that you can manage without, you may be able to get a larger amount of money right in your hand. Then you can use this amount to pay off a large portion of the most expensive loan. If you can redeem that loan completely in this way, it is very good but it would be nice if you can pay off part of it. Continue to make extra payment on the most expensive loan until it is completely gone. It might take a while but just drive on.
When you have paid off the most expensive loan, you have suddenly freed up some money that you previously had to put on that loan in the form of amortization and interest. Then take that money together with the other extra money you saved and pay extra on the second most expensive loan. You can now pay off faster because you have more money to spend.
It becomes a kind of snowball effect for every loan you pay off as you get more and more extra money to deal with for every expensive loan that disappears. After a while it may be possible to pay off the loans fairly quickly. Remember to constantly spend the money you saved on getting rid of the old loans as installment on the next loan that is on your “list”. In this situation, you may be able to avoid skipping as much as before or you will continue to skimp and pay off the loans a little extra quickly so that you do not get rid of them completely.
General tips for debt relief
It is not easy to carry out such a debt restructuring because it requires you to save quite a bit, save money and find some extra money you can put on your loans. You may also be required to sell some of your gadgets to get extra money. It is tough but it is sometimes necessary. Even if it takes time, you have to keep going and fight. When the first loan is redeemed, it often gets a little easier right away and then it just gets better for each loan that disappears.
If you are at risk with bills and debts to be paid, which you cannot really afford, you may try to call these creditors to discuss different plans for payment of the debts. Many people can think of a repayment plan because it is better to get their money slowly than not to get it at all (for example, if you are forced into a debt settlement with Kronofogden, which is often disadvantageous to ordinary creditors).
Collecting the loans – One thing you can try is to try to get a single large loan with low interest rates, for example from one of the major banks, which you then use to pay off all the less expensive loans directly. This solution usually saves you quite a lot of money each month and it also gives you a better overview when you only pay on a single loan.
The trick with this method is to get the bank to approve your large loan. You have to have a sensible economy for them to dare to give you a loan. Fixed income is often a good start, but you may also need to have more positive things in your finances. A co-applicant may be an option that increases your chances. If you manage to get a loan – then don’t spend the money for anything other than just paying off your expensive loans and credits, otherwise it won’t work.
If you get too deep into the debt trap and have no chance of solving it on your own, it is a debt settlement at Kronofogden that will be aimed at. You can apply for one at the Crown Prosecutor’s Office and then you have the chance to a fresh start in your finances, but it is not easy to get approved for this and you only get one such opportunity. Don’t swamp it.