From Red To Black: How Fipro Can Help Erase Your Debt

Debt can be a heavy burden that scales down your financial well-being, hindering your ability to achieve your goals and live life to the fullest.When you’re shouldering high-interest debt in the form of credit cards and loans, paying it off ASAP can help you improve your finances and build stability. But that can be challenging, especially if you’re juggling multiple balances, working with a tight budget or simply don’t know where to start. But fear not because Fipro is here to help you transition from the daunting red zone of debt to the empowering black zone of financial freedom. 

Some Of Our Best Strategies For Getting Out Of Debt

1. Track Your Spending

Starting a budget is a key move to pay off debt faster. A budget is a plan for directing funds toward spending, saving and paying off debt. It is essential to track your spending. Many families forget an important step to a successful budget—feedback. For your budget to be successful, you need to track your actual spending with your expected spending.

For example, you might write a budget and plan to spend INR 10000 dining out monthly. But to see if you are stuck within your limits, you’ll need to keep track of your actual spending. Use a spending tracker to categorise your spending each time you make a transaction.

2. Set Debt Priorities

You can apply two main methods when deciding which debts to prioritise paying off first: the debt snowball strategy and the debt avalanche strategy.

The debt snowball method has you pay off your debts in order of size, starting with your smallest balance. Make only minimum payments on your other debts, then funnel whatever extra you can afford to the debt with the smallest balance. When that balance is paid off, move on to the next smallest, and so on. The debt avalanche method has you focus on paying off balances according to the interest rates on each account, from highest to lowest.

Both debt repayment methods have advantages, the avalanche method may save you more money in the long run, but the debt snowball method can motivate and give you a sense of accomplishment as you pay off smaller debts first. You should stick with whichever method motivates you.

3. Balance Saving and Debt Repayment

The key to finding long-term financial stability is to balance paying off debt with another important money move: saving. It’s important to prioritise Loan repayment, but having some savings set aside for emergencies and future expenses is equally important.

We suggest you set aside at least three to six months of essential emergency expenses. The reasons are twofold- firstly, it can help you avoid taking on more debt in case of an unexpected expense or emergency. Plus, having some savings help you feel more financially secure and reduce your stress levels.

4. Consider Consolidation

You can meet the requirements for a debt consolidation loan if you have good credit. Consolidating your debt is when you fold multiple balances into one new loan. The new loan should have a lower rate than the average rate of your current debts. Consolidation is an option worth considering if you’re juggling multiple balances. It can help you simplify your finances and reduce your overall interest rates. Consider all your options before you rush into consolidation. Remember that debt consolidation is only one tool in your financial toolbox and may not be the best solution for everyone.

5. Talk to Your Creditors

If you’re deeply in Loan, you may need extra help getting back on track. We recommend you talk to your creditors to see if they can provide you with a hardship plan. Communicate with your creditors openly and be honest about your financial situation. Many creditors are willing to work with you to find a repayment plan.

A credit card hardship program may come with deferred payments, temporary reductions in interest and reduced fees. While not all lenders offer hardship plans, checking in with your lender or credit card issuer is always a good idea if you’re struggling to afford payments.

The Bottom Line

Getting out of Loan isn’t easy, but there are places you can turn to for help. Consider reaching out to a financial planner for a more long-term approach to structuring your finances. They can help you make a comprehensive plan for managing your debt, saving and investing for a financially secure future. Remember, financial freedom is always within your reach, and Fipro is here to guide you every step of the way.