All About Debts

One of the best ways to speed up the repayment of your debts is to focus your attention on paying off the loans that carry the highest rate of interest first. Get rid of the debts that cost you most to service.

Debt Help Here's what to do. Compare the interest rate on each of your loans and repay those with the highest rate first. The only way to do this is to look at the rate of APR on each of your debts. That's the only way to decide which debt is more expensive. If you're unsure, check your loan agreement or ask the lender.

Debt counseling will not allow any of the debt to be written off at this stage. You will have to repay it, although your monthly repayments will be less with a longer repayment period. The NCA should be seen as supplementary. The regulations relating to Debt Collection fees, for example, are not affected by the NCA.

Counseling Debt Then, it's just a case of throwing everything you can at the debt with the highest APR (provided you can still make the minimum payments on your other debts).

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Consolidation Consumer Debt Then move on to the next most expensive debt, and wipe it out. Then focus on the next most expensive, and the next, and the next, until you're entirely debt free!

Lets assume, for example, that you have R1 000 available to repay debts. This is the money that you will be using to accelerate your debt repayments and pay off several debts quickly. Does it matter which debts you repay first Very much so! This is a very important point because they are costing you anywhere from about 30% to 100%+ loans! Other baddies are credit cards (23% to 39%), small personal loans (15% to 45%) and old debts (40% to 60%).

Debt Settlement This means that you should normally aim to pay them off in the following order.

• Store cards, catalogue accounts and other hire purchase agreements


• Overdrafts


• Credit cards


• Personal loans/Car loan


• Mortgages and other secured borrowing

Get The Best Deal

How to stop three quarters of your money going down the drain. South Africans now spend 75% of their monthly income on debt repayments! That's three quarters of every Rand earned! And considering that your cheapest debt is costing you probably at least 11% interest a year, your average debt about 23%, your most expensive debt possibly 40% and old debt 50% per annum, what this all adds up to is that most of your money is going down the drain (or to make the banks richer, if you prefer!).

Debt Free Get the best loan deals that are available to minimise the interest that you pay.

Rather than getting into a routine of excessive spending every payday, he suggests getting into some good habits from day one. Pay off debts The first of these is to pay off debts, such as student loans, as quickly as you can. If you can afford it, ask the bank if you can pay more than the minimum monthly repayment and shorten the repayment period. Not only will you save interest, but youll also be able to start accumulating wealth sooner.

Consolidation Debt Service Fact: It's much easier to repay a loan with an interest rate of 5.9% APR than one set at 29.9% APR.

Company Consolidation Debt The less interest that you have to pay, the more you'll have left to repay the amount originally borrowed.

Consolidation Debt Online Transfer each of your debts to as low a rate of interest as you can find. Transfer debts on your credit cards to a lower rate card. You might be able to find a card that gives zero percent interest on all balance transfers for 6 months. Likewise, why continue to pay 30% APR on your storecard debts, when you could transfer the balance to a credit card that charges a much lower rate.

Consolidation Debt Free But if you decide to do that, I've got two warnings for you. When you transfer debts from one of your plastic cards, destroy the old card immediately!

Debt Problem Avoid the urge to keep them, or before you know it both cards will be up to their limit, and you'll be looking for an even lower rate just to keep up with the repayments.

Credit Debt And second, don't waste these interest free periods. Just because you don't have to pay interest for a while, don't ease up on your efforts. Keep paying as much as you can to reduce the size of the debt.

Advice Debt Interest free periods are a golden opportunity to substantially reduce your debts. Don't look on them as a 'payment holiday', or as an excuse to increase your spending.

Card Credit Debt Eliminate

Debt Recovery Stuart runs a website dedicated to helping people get out of debt. So if you want to improve your financial position, visit www.icanhelpyougetoutofdebt.com for free, impartial information on how to reduce debt.

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