If you are struggling with debt, you are not alone. Many people across the globe are likely to be in the same position as you. Debt can cause a lot of stress, pressure on relationships, depression and mental health problems. Getting caught in a spiral of debt feels like a never ending battle – but it doesn’t have to be.
According to Reuters, global debt ended 2019 at a record high of more than $255 trillion, the Institute of International Finance estimated that this equates to nearly $32,500 for each of the 7.7 billion people on planet.
But there is help at hand. Many debt charities have been set up across the world to help people gain access to the information and advice they need to tackle their debt head on, and live with healthier spending and saving habits. For instance, you can call Consumer Debt Help who say that to date there are over 9 million South African consumers struggling with debt and are looking for consolidation loans for bad credit. They can help you with your financial problems and point you in the right direction for sorting out the debt spiral you are in.
Wonga released a useful debt management guide suggesting the first things you should do is determine what is good debt, and what is bad debt. Debt is not necessarily ‘bad’, as credit can empower you to fund emergency expenses, manage your cash flow, or pay towards getting a tertiary education when you otherwise don’t have the money on-hand to do so. However, borrowing too much at once can land you in serious financial and legal jeopardy if you aren’t able to repay your debt on time – which is why it is always important to borrow carefully and responsibly, and from a registered credit provider. So it is wise to first list all your outstanding loans and figure out what is ‘good’ and what is ‘bad’.
Wonga also reference a method called the snowball effect for paying off debt– which could help you get out of substantial debt. This involves making regular overpayments on your loans, so you might be able to reduce your total interest and fees payable over the long term, allowing you to finish repaying that loan earlier than expected. You can get the help of a financial advisor to assist you with this if you are struggling to figure out where to start.
You may also consider a debt review. Also known as debt counselling, this is a process where someone who is indebted can speak to a debt counsellor. This person will review that person’s debt and will implement a structured repayment plan. If you choose this method, remember that you will be charged. Your fees will include an application fee, an administration fee, and an aftercare fee.
However you tackle your debt – it is wise to just make a start. Many people bury their heads in the sand and this is not helpful, and only exacerbates the problem. Addressing the issues here and now allows you to take ownership of your finances and puts you in a better position in the long run. It can be easier than you think to get out of that spiral – why not make that start today?
To read more on topics like this, check out the finance category.