How to Get out of Debt and Restructure your Finances

21 August, 2018

Are you frequently worrying about all the debts you have accumulated due to imprudent financial decisions? Being in a debt is not only financially unsettling but it can also have an impact on your mind and increase the stress levels. However, a lender will not be concerned by the life facts like losing your job or having a medical emergency. The banks and NBFCs will like you to continue repaying your loans on time regardless of your personal woes.

So how do you get out of a debt trap that is giving you sleepless nights? Well, the good news is that there are lending platforms that offer fast debt consolidation loans who do not require you to have a perfect credit score or ask for a ton of documentation before approving your application.

With help from these marketplace lenders — such as Monexo — and by following financial discipline, you can get out of debt and restructure your finances easily. Here are the steps you should follow to get started.

Assess your personal debt

Since sundry debts are quite easy to accumulate, the first thing you need to do is track down all the little repayments and EMIs eating away your monthly income. The credit card repayments, EMIs for past loans and little reimbursements to friends and family members, all need to be considered to give yourself a realistic idea of your current accounts payable situation.

Identify the troublemaker items

The reason we don’t realize the extent of debt as it piles up is because of small EMI options on consumer loans and credit cards. While a piece of furniture you bought in the past might have been advertised as ‘Only @ Rs.749 per month’, buying tens of similar items will increase your monthly debt ten-fold. So, list all these recurring payments separately and then plan your monthly budget.

Be prudent with your budgeting till you get out of the debt

Another reason why you are in a financial mess is that you are spending freely on outside food, movies and things freely, despite having a loan to pay. As you know, these entertainment trips come at a cost and maybe costing too much in your case. So, budget with a realistic approach to repay the loans and avoid sundry expenses for the time being.

Apply for a debt consolidation loan

 Now that you are all set to meet the challenge, get online and shop for a debt consolidation loan. It is a personal loan which you can take to repay all your debts and break it in even monthly installments. While people usually go to banks and NBFCs for loans, Fintech platforms like Monexo offer better alternatives for people looking for personal loans at low interest rates. For example, Monexo is a peer to peer lending platform that offers interest rates as low as @12.98% per annum.

Unlike banks, who use depositors’ money to fund loans and hence are more cautious in giving approvals, P2P Loans are funded by investors. So, the person providing money for your loan is looking for a healthy return on his investment. If your profile provides adequate guarantee of credit worthiness then you can get a personal loan that has been rejected by a bank or NBFC.

Putting your house in order

So, once the loan funds are in your bank account, use them to repay the largest parts of your debt such as pervious loans, credit card dues etc. and then settle your smaller personal debts. If you are not sure that you have the self-control necessary avoid future credit card debts and such, you can also limit the number of cards you have by closing some of those accounts or setting monthly usage limits on your credit cards.

Now that all or most of your debts are settled, budget for repayment of the debt reconsolidation loan because it will help you in setting your credit score right as well.

Ready to apply for a debt restructuring loan? Visit www.monexo.co/in now to apply for a personal loan online to settle your debts.