It’s not always necessary to feel stuck when you’re in debt. While things could be better, it’s important to be proactive, so you don’t lose hope.
Unfortunately, personal debt records in Northern Ireland are known to exceed those of the wider UK, so a keener sense of financial strife may be felt here. Despite the period of hardship most people are continuing to endure, there are ways to chip away at what you owe steadily.
Depending on how bad your debt is, solutions and strategies may need to be somewhat bolder than what you might expect. Saving where you can or seeking help from loved ones can help, but in most cases, only so much.
So, how can you pay off debts as comfortably as possible? We’ve listed a few suggestions below that you might find helpful. It is also worth noting that having a sufficient savings plan can also help you stave off debt accumulation by giving you the breathing space you need in a pinch. Check out the following article for more helpful tips.
Target Loans with Higher Interest Rates First
Bigger loans can have higher interest rates. If you leave them unattended, they can continue accumulating over time, and eventually, the minimum payments you can afford have much less impact than you had originally planned. If you have multiple debts, things can quickly spiral out of control.
The tactic of paying off the highest interest rate loans first is referred to as ‘the avalanche method’. You first repay the debts with the higher interest rates while only paying minimums on the others. Once that’s done, your leftover money can cascade onto the next highest-interest debt, and the process repeats as it earns its namesake; the avalanche method. Hopefully, the last and cheapest debt in your name doesn’t stand much chance.
You may need to liaise with the lenders you’re paying minimum fees to as you do this, as the avalanche method can defy their usual order of things. Once you’ve explained what you’re doing, they may be able to help and advise you. They shouldn’t try to stop you, nor have any legal basis for attempting to.
Obviously, you’ll need to be incredibly organised to succeed in this. Unfortunately, one Northern-Ireland charity found that 3,000 people who approached them amassed £22 million in debt between them. It’s forecasted that NI debts will likely worsen due to the current crises, so your endurance and sense of perspective matter greatly with the avalanche method.
Take Out a Personal Loan
The idea of taking out a personal loan, otherwise known as an unsecured loan, may not seem appealing today. As economic challenges surface, consumer spending is being stretched thin, and courting more debt is the last thing many households might need.
Still, if repayment deadlines are looming, taking out a personal loan and using it to pay off what you owe can buy you some time. It’s a quick solution and can be a part of a wider debt repayment strategy called debt consolidation. You can square away the balance left on any outstanding credits, for example, and then later make just a single payment to the lender.
You shouldn’t try to source your loans from anywhere, so it’s important to work with comparison services that completely protect your interests. CompareNI offer personal loans in Northern Ireland and beyond, listing other lenders from the UK too. This can give you a wider range of support and lift your spirits, as you’ll have more options at your disposal than you thought possible. Instant loan quotes from over 50 lenders are available, and they help you find the right one so you can apply in minutes.
It’s worth noting that extreme caution is required with this method of paying off your debts. Use a trusted Loans Eligibility Calculator to ensure you can pay everything off. Not all loans in Northern Ireland will be suitable, so double-check the interest rates to ensure they’re manageable and not leave you in a messier situation.
Utilise the Breathing Space Scheme
While debt repayment solutions mentioned so far have a sense of speed, your decisions must be carefully weighted at these crucial junctures. Different types of debt require different responses and nuances to consider with every option.
Therefore, you should not approach these problems hurriedly or frantically. While it can seem like the process of repaying debts is a ticking clock, the government’s Breathing Space scheme gives you 60 days of calm so you can get your mind and affairs in order. During this time, creditors can’t contact you, force payments through, or add interest and charges to existing debt.
A debt advisor will need to be consulted first to double-check that the scheme covers your types of debts. Given that credit and store cards, overdrafts, arrears on household bills, and loans are covered, it’s quite likely they are, but trust in their counsel all the same. Many people wish they could ‘stop time’ when tackling debts, and now a figurative version of that is possible.
Try not to underestimate the value of your well-being when it comes to problem-solving. Once you’ve had that break, you may feel better equipped to tackle the challenges ahead.
