Taking a Look at Your Debts: 3 Tips to Paying Off Your Debts Sooner
Did you know that Australia has the highest levels of household debt in the world? Those who are struggling with debt and feel like they're drowning financially should highly consider making an appointment with a financial adviser. A financial adviser can review the type and amount of debts your household has and come up with a strategic plan for you to pay off your debts sooner, so you can finally enjoy the financial freedom you deserve. Here are three common tactics.
Take Care of High Interest Debt First
Before a financial adviser can give you any advice, they'll need to take a good look at all of your household debt. This includes anything from subscription fees to the mortgage amount you still owe. The debts will be ranked in order based on the interest rate that is charged. Debts with a higher interest rate take priority and need to be paid off first even if the amount is less than other debts. The higher interest rate means that you're paying more for these debts overtime.
Automate Payments to Avoid Late Fees
If payments are not automatically deducted from a bank account, most financial advisers will highly recommend that you set up an automatic payment plan immediately. It can be difficult to remember when each payment needs to be made, and late payments come with costly late fees that will only keep you in debt for longer.
Negotiate Payment of Debt for Accounts You Wish to Close
Do you have unsecured debt from a creditor that you'd like to take care of once and for all? If you plan on closing your account with the creditor, the financial adviser can call the creditor on your behalf and negotiate for a reduced debt amount. If you are able to pay off the entire debt amount in full, you'll be off the hook for the rest of the balance. This is highly recommended for those who are leaning towards filing for bankruptcy in the future, as unsecured creditors might not even see a dime of that money if you do end up filing.
Get on top of your debts sooner rather than later, and you'll finally have some breathing room financially. If you've been having trouble managing your finances, help from a financial adviser might be just what you need to get back on your feet and start having money to put away for a large purchase or for rainy days ahead.
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