Devising a Budget and Budget Counseling
Preparing a budget plan for your spending will help you begin your debt reduction journey. Consistency is key. Once you make your budget, you have to stick with it.
Having a budget will allow you to set aside a portion of money each month to contribute to your debt. As you lower your debt, you save money that is collected in interest fees. Consulting a professional debt counselor can also help keep you on track to eliminating your debt.
How to Combine Your Debts
Combining your debts is known as debt consolidation. Usually in the form of a bank loan, debt consolidation allows you to pay your creditors all at once.
Rather than making multiple payments to your creditors, you can now make one monthly payment, often at a lower interest rate than you were currently paying. A debt consolidation loan will help you save money on interest fees so that you are able to pay off your loan faster.
Contacting Your Creditors
You can also reduce your debt by making new arrangements with your creditors. You can contact your creditors and discuss available options for lower monthly payments, lower interest rates, longer time frames to make your payments. In many cases, a debt management advisor or credit counselor can do this on your behalf.
Working with Mortgage Lenders
The Canada Mortgage and Housing Corporation advises you contact your mortgage lender as soon as you run into difficulty with your mortgage. Your lender can help you find a solution.
Selling Your Possessions
A personal possession is something that you own, and do not owe any money on. If you need some extra help paying off your debt, in addition to your savings budget, selling a personal item may be a good option for you.