Mistakes you must avoid when paying off debts

Pulling yourself out of debt can be incredibly challenging especially when other necessary expenses are fighting for your resources as well.

We want to make the process smoother and quicker, by showing you several mistakes you must avoid during this time, so you too can be debt free!

When someone is in debt most of their effort, rationally, should go towards paying off the debt, so why then would they still consider frivolous expenses? (I know you’re not like that sha).

But if for any reason you struggle with bad spending habits that are hindering your finances and you urgently need to clear up debts, here’s what you can do — find better and cheaper alternatives to curb overspending; You want to eat out with friends to catch up? Host an indoor movie hangout with a home-cooked meal. New clothes? You haven’t finished wearing the ones you have . Gadget upgrade? Beautify the one you have (change the screen and get a new pouch). Make a genuine effort to avoid bad spending habits that are likely to push you deeper into debt.

“No man is an Island”

Being in debt doesn’t automatically make you a lone wolf, you can ask for help from family and friends, and if you can’t do that (you may feel uncomfortable going to them and that’s okay) there are always other options.

You can turn to people around you who can help you create an effective budget system or also try getting an extra income from working for sure jobs. Look through some of your under-utilized skills and start monetising them. So many options available abi?.

Taking on all that pressure alone can be bad for your mental health, so please do ask for help.

One mistake you must avoid is having no form of budgeting, this would not only slow down your debt repayment, but your finances will also be jaga-jaga.

And that’s why you must create a detailed and realistic budgeting system.

Every aspect of your spending is taken into consideration when making a budget, expenses that you can do without should be taken out entirely and expensive necessities should be exchanged for cheaper alternatives.

The budgeting system should be made around the debt to be paid and with that, every other expense can be calculated in a way that is affordable and efficient. And that’s a smooth path to the “debt-free” bus stop.

The idea that splitting your finances to tackle multiple debts at the same time will speed up repayments is false. It does work in few cases but puts a damper on your standard of living and leaves you drained in the long run.

A more effective way of debt repayment would be to pay off the larger debt first as they are likely to have higher interest rates. This will free you up from financial constraints in a better fashion than trying to pay off all loans at the same time.

A very common mistake that you must avoid at all costs is the mistake of hiding from your lender when faced with a financial crisis and being unable to repay your loan on time.

The truth is, engaging with your lender honestly and asking for a loan term restructure is well within your right as a borrower.

Lenders are obligated to listen to your struggles regarding debt repayment they would like to know because your struggles also affect their business. They are willing to make adjustments where it is necessary (reducing interest rate, extending repayment period). Here’s a step-by-step process on what to do if you can’t repay your loan when due. Nevertheless, it’s not only during times of struggle that your lender would like engagement, feedback on the loan processing and repayment is also welcome and help to build rapport with your lender.

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As always, Irorun wants you to enjoy a seamless borrowing experience through AUTHORIZED and ETHICAL Lenders (coughslike us).

Send us a message today at support@irorun.com and get matched with the loan that’s just right for you!