Tips to get out of debt and reduce your debt in the UK
- December 9, 2022
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I’m sure you’ve heard about the debt crisis in the UK, and how millions of people are in financial trouble. If you’re like me, this is probably worrying you quite a lot. However, as long as you stay calm and do your research ahead of time, there are plenty of ways to reduce or get out of debt in UK!
There are lots of ways to reduce or get out of debt in UK.
There are lots of ways to reduce or get out of debt in UK. You can:
Find an affordable debt management plan.
A debt management plan (DMP) is a type of credit counseling that helps you manage your debts. It allows you to pay off your loans in manageable installments over time, instead of all at once.
This is an arrangement with your creditors that allows you to pay off some of your debts over time without having to make large lump sums payment and will help you keep track of how much money you are spending each month. A good thing about this is that it will also help lower interest rates on your loans so it’s worth considering if you have any interest-bearing debts, such as credit cards or overdrafts on an account at a bank/building society or other financial institution (such as car finance). There are two main types of DMPs: a debt consolidation loan and a debt relief order. The difference between the two is how they help you pay down your debts more quickly and efficiently—and whether or not they’re available on the UK market.
Cut down on your credit card usage or stop it altogether.
If you’re using your credit card to buy things that you can afford, you should stop. Use your card only for emergencies and keep track of all the expenses on it. Don’t use it for unnecessary purchases and try to repay the amount on time, or even better if possible pay as much as possible because interest rates are usually high when compared with other loans available in UK (such as mortgages).
Make a list of your debts, start with the most expensive one – pay it off first
The first step to reducing your debts is to make a list of all the debts you have. You should start with the most expensive one, as this will be easiest to pay off and will give you the biggest bang for your buck in terms of interest repayments.
- Pay off smaller debts first: This may seem obvious but it’s important not to leave any outstanding debt until last. By prioritising which ones need paying off first, you’ll be able to feel more confident about keeping up with monthly payments and reduce stress levels during this period.
- Pay off debts with high interest rates first: If there’s a high-interest rate on one particular loan or credit card, try paying that off first before moving onto another one that has lower rates (but still needs repaying). This will help keep things simple by ensuring everything is paid off within 12 months so no one gets confused about what’s due when!
Change your spending habits.
- Stop buying things you don’t need.
- Don’t eat out as much, especially when you can cook at home.
- Reduce your clothing budget and buy used or secondhand clothes instead of new ones (although this may be difficult for some people).
- Ditch the monthly gym membership and get a one-off fitness class instead if it helps motivate yourself to exercise more often!
Look out for cheaper deals.
- Shopping around
- Use comparison websites.
- Ask friends and family for advice.
Get free debt advice to get out of debt faster
We hope we’ve given you some ideas on how to reduce your debts and get out of debt. Whether it be by changing your spending habits or finding an affordable debt management plan, there are lots of ways to do so. If you have any doubt about debt management or struggling to pay off debt then please contact us today at +44 7779648018