HOW TO PAY BACK BAD LOANS
Bad loans are a financial burden to bear. The emotional and psychological trauma bad loans can cause can make anyone afraid to even look at it. But here, I am going to show you how to pay back your bad loans easily, without even needing another loan to sort it out.
But first, you need to identify what kind of loan you have. Not all loans can be regarded as bad loans. Taking a credit facility that will generate revenue to pay back your loans and also be an additional source of income now or in the future cannot be regarded as a bad loan. A bad loan, however, is the one you take, probably to consume frivolously, and cannot be repaid due to various reasons.
There are steps to be taken once you have acknowledged it is a bad loan that you do not want to continue in.
1. Understand that there is a problem: Come to terms with the fact that you owe money and be ready to take steps to help you get out of it. That is the beginning of your freedom.
2. Debt is a game of mathematics: This is very simple. Debt is equal to what you earn minus what you spend. If it is negative, you are in debt. If positive, then you are not in debt. Watch what you spend by putting your expenses on a budget.
3. Understand your income: Calculate how much you earn, what you need to increase your income, and what exactly you need to live comfortably within your means. Write them down, preferably. It is pertinent for you to know how much it is you need on a monthly basis. One of the things you need also to stick to your budget is insurance. Insure everything.
4. Create a budget: You can do this after you have understood the numbers. Have a talk with your Creditors for restructuring and have a plan so it becomes very convenient to pay back. Try to stay upright.
5. Start Implementing: Put to work everything you have learned to stay out of debt.
6. Get Educated: The most important thing is to keep educating yourself about your finances. Read books, attend training, and don’t stop investing in yourself. You need to learn to become financially savvy. Knowledge is the bridge between where you are now and where you want to be.
7. Increase your Source of Income: Knowledge will help you know what else you can do to increase your income. Increasing your income could also be working extra jobs and investing in instruments where you can earn more even while you spend e.g., SaversClub™.
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