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At some point in your life, there’s a high possibility you’ll end up in debt. It happens to most people for one reason or another – and it isn’t always a bad thing. Sometimes, you need to be in debt to achieve certain things. For example, you need a loan to buy your first house, which means you have to be in debt. Of course, some debts are worse than others, and they can be financially damaging.
Speaking of which, you have to learn how to tackle your debts. Today, you’ll see the top three WORST things you can do to deal with your money problems. Give them a read, then be sure you don’t do any of them!
Ignore the debt
It’s never a good idea to ignore your debt as it will just get worse. Debt doesn’t care if you pay attention to it or not. If you ignore your debt, it will just accrue more interest, meaning you have more money to repay. In turn, this obviously makes it a lot harder for you to pay your debts, which sends you into a spiral that you can’t get out of. The thing is, there’s no excuse for avoiding your debt! It’s something you can tackle on your own, or you can get legal advice from companies like Wyolaw Law Firm. Either way, the worst thing you can do is turn a blind eye and hope everything turns out okay. Here’s a spoiler alert: it won’t!
Get a short-term loan to pay off the debt
Never ever get a short-term loan to pay off your debts. Why? Because short-term loans are deadly! They’re almost designed to catch you out, which is why banks don’t provide them anymore. You’ll often see them advertised as payday loans, and the concept is that you get quick money to pay for something. In this case, you pay your debts. The problem is that this lands you in debt once more. To make matters worse, short-term loans usually come with outrageous interest rates and all sorts of fees and penalties. So, if you can’t repay the payday loan in a few days, you’ll be charged extra and the loan starts to grow. Instead of getting out of debt, you’ve got yourself into a deeper and stickier mess.
If you can get a longer-term loan or a consolidation loan, that could be a better idea depending on your circumstances, but you may need to ask the question ‘What does self-employment change in your loan application?’ If you happen to work for yourself before you go down that route, and you should always, no matter what your situation, work out how much interest you’ll be paid back first.
Lose hope
Finally, it’s never a good idea to lose hope when tackling your debts. Lots of people slip into a dark pit of despair when money problems come their way. Sadly, this leads to some individuals taking their lives as they can’t see a way out. Understand that all debt can be solved in one way or another. Speak to professionals to get the advice you need, and don’t forget that bankruptcy is a viable option. There’s a stigma surrounding bankruptcy, but it can help you clear your debts and enjoy a fresh start. It’s not ideal, but it shows there is still hope to start again.
In summary, the three worst things you can do when tackling debt are: lose hope, ignore it, and take out a payday loan. Pay attention to these points as you really don’t want to be guilty of doing any of these three things!
