If you were asked today what you are most embarrassed about, what would your answer be? The maximum answers have been- weight, credit score, a drunken memory, and credit debt. It is understandable to borrow money in emergencies. Financial crisis befalls upon us all, and taking loans not uncommon in the UK.
What is worrisome is the repayment of those loans. When a borrower is unable to make the payments for a loan, the interest starts accumulating and soon burdens the person heavily.
This especially applies to the no credit check loans with no guarantors category of loan applicants. Since the risk involved in lending to them is high, they find it difficult to stay on time in paying back what they borrowed.
As the debt keeps piling up, the borrower is oppressed under the huge financial obligation. An aura of absolute and continuous embarrassment and shame is created around him.
While these feelings are comprehensible, they provide no solution to the rising problem at hand. Moving around with head down and filled with anxiety about paying off the debt does not pose an answer to the issue.
It, therefore, becomes necessary to stop thinking and start acting in coming out of this phase.
Differentiate & Accept
The first step is to understand the difference between behaviour and character. This is necessary to stop the blame game and come out of anxiety.
Unable to afford repayments is a behavioural trait and does not define the character of a person in any way. Being short of money is a circumstance that can arise in anyone’s life.
Unless you intended not to return the loan amount, it is not your fault to have run out of money. The world knows this difference and has accepted it without judgements. You should too.
Make Yourself Aware
Your hardship is likely to have risen due to the absence of financial literacy. It is possible that you were unaware of your options and obligations in the first place.
Open your desktop and read about the experiences of other people like you. You would discover many financial aids and guides to help you through your debt.
Look for videos or online courses educating people about handling finances. You may have not changed your spending habits even after taking a loan. You have to alter your expenditure when you have a debt to pay.
Rote your dos and don’ts when under debt, and make it a point to follow them.
Throw Away Credit Card
Not literally though, but yes. Stay away from your credit card till all your piled up debt is paid off. It is important for you to realise that you are overspending when you are using your credit card. And that bill is adding on another debt to your already existing one.
Be sensible to stay within your budget. Avoid stepping out of your affordability. When you already have a big amount to pay back, strictly restrain yourself from avoidable expenses and triggered shopping.
Take Financial Advice
If it is getting difficult to get hold of your finances, it is alright to seek outside counsel. Talk to a financial advisor or someone around you who have been in your shoes. They would prove to be of great help in guiding you in the right direction.
Getting a first-hand account of a situation is beneficial for your confidence and clear-sightedness. Do not hesitate in asking people for advice.
A hidden treasure for you in this scenario can be the debt-consolidation loans without a credit check. These would consolidate all your debts into one, and you would then be liable to pay off just one debt, instead of many.
Now when you have all your cards in the deck, it is time to start acting. Follow the cycle of smallest or highest first based on your convenience.
- Select the highest interest incurring debt or the smallest balance debt.
- Dedicate your extra earnings or saved amount to the repayment.
- Pay for the one debt till it is over.
- Congratulate yourself.
- Select the next highest interest incurring financial debt or the smallest balance debt.
- Repeat the cycle.
Taking small steps can help achieve big targets. Clearing one debt at a time will lead to being debt-ridden in an easy and stressful method.
It takes time and patience to come out of a serious situation. Stop beating yourself up and give yourself time to clear off your debts.
Being under debt is not uncommon in the UK. While missing repayments is a serious issue, it is more important to focus on remedial actions to pay back your debt. Pay attention to finding solutions to your hardships and not towards escaping them.