In order to pay off debts, you need to follow several steps. Financial consultant, investor Tatyana Volkova on February 28 told Izvestia how to act in such cases.
In order to get out of the debt hole, you need to conduct an audit, the expert said. It is necessary to write out the balance of the debt, the loan rate, the monthly payment, she explained. As a result, it will be possible to see and understand how things are with the financial situation.
The next step is to allocate the most expensive loans with a large overpayment.
“After that, you need to work with each loan separately. For example, if you have a credit card where the grace period has ended, or a consumer loan with a high interest rate, you can consider refinancing,” the financial consultant advised.
A credit card can be closed by taking a consumer loan, which will be cheaper, she noted.
“In this way, you can reduce your credit burden. After closing a credit card, it is better to cut it and throw it away so that there is no temptation to use it again, ”the investor advised.
The best option is to find a person from whom you can borrow money without interest and close the loan, the expert believes.
“This method may initially be questionable, but if you make an effort, then you will surely find a friend in your environment who could borrow a substantial amount for an indefinite period. In this case, you will be able to repay the debt without interest and quickly close financial holes, ”explained Volkova.
In addition, you can use the method of debt restructuring.
The next thing to work on is the development of a plan for early repayment of debts, the financial consultant emphasized. According to her, there are several ways to develop such a plan. The first is to keep track of expenses in order to see the “holes” in the budget.
The second way is to apply all possible options for competent savings in order to free up 3–10% of current expenses. It includes cashback for paying with a plastic card, online purchases in advance, monitoring the best price, Volkova specified. All this, on average, will lead to savings of up to 30% of current expenses, the saved funds can be used to pay off debt, she said.
“Another lever is income. To get out of the debt hole, you need to develop a strategy to increase them. For example, to sell something unnecessary,” she said.
The expert clarified that you can also find out from the employer how you can get a salary increase. She advised entrepreneurs to “consider growth points for the business.”
In parallel with this, it is worth introducing the habit of keeping at least 10% of income for yourself, which will stimulate earnings and capital formation, the investor believes. The amount can be placed in the bank at interest, and after a while this money will be able to close the debt.
In addition, tax deductions, subsidies, grants, if available, should be used, the financial consultant added.
“The last very important point is working with beliefs, attitudes and thinking. The presence of loans and debts is always about a financial program based on a shortage of resources, where there is not enough money and everything is expensive. Try to identify limiting beliefs. Turn on the observer to notice automatic reactions. And begin to form an abundance mindset, noticing the opportunities around, introducing the thought into your mind: “I have money,” Volkova said.
At the same time, she stressed that it is necessary to improve one’s professional level, not to take new loans, to look for opportunities, to study.
“All this will allow you to get out of the debt hole and not fall into it again,” the expert concluded.
At the end of January, the director of the department of banking regulation and analytics of the Central Bank, Alexander Danilov, gave a forecast according to which, by the end of 2023, the growth of consumer lending in the country will be within 10%.
On January 27, the Scoring Bureau told Izvestia that Russians were twice as likely to close consumer loans ahead of schedule.
