Personal debt is a problem that many of us will face during our lifetime. It can be to different degrees and there is always an option to help people even in the most agonising and difficult situations. There are a number of personal debt ‘statements of fact’ that are widely known throughout our public consciousness that might not be factual after all. We’ve taken a look at a few of these and aim to put to bed the myths of personal debt and to show you how you can find help and claw your way out of personal debt, even if you are in the worst financial scenario of your life and are struggling to see a way out currently.
The first myth is that to have any debt at all attached to your name and credit score is a bad thing for your financial future. It may seem a simple and honest truth but there is such a thing as good debt to have. Over the years there have always been irresponsible lenders, with no aim but to take even more from their customers, even if that means putting them in an even worse financial position than when they came looking for help in the first place. There are though, responsible lenders, from high street banks to reputable payday loan providers that can offer short-term financial help that doesn’t harm your credit score or future applications for mortgages and other lines of credit.
Another fact is that you are ok to keep paying the minimum repayment on your debt. Whether this is a loan or a credit card it is often the easiest approach for many to keep the debt coming down by paying the minimum expected payment each month. This only exacerbates the problem, as you will end up paying much more, over a longer period of time, than if you make a concerted effort to pay a higher figure over a shorter period of time in order to pay the debt off.
If you have a plan of action and know that you can pay off the debt each month, owning multiple credit cards at one time is not as irresponsible as you’ve been led to believe all your life. Being able to pay off multiple lending streams each month is, in fact, a good thing for your credit score and will help you to build it positively.
If you are faced with multiple debts do not panic. You may have been advised to pay off the high interest debt before tackling anything else, but in terms of being motivated to carry on paying off debt on a regular basis and in an effective manner, it is much more effective to pay off the smaller debts first. It is much better for your mind to clear debts off the slate completely as it is a motivating routine to be in. By the time you reach the larger, high-interest debts you’ll be in a routine where you are used to paying debt on a regular basis.