Manage Your Debt

It has become really hard dealing with credit in the present economic conditions. Your loan application is examined more thoroughly now by lenders and banks. Your credit report is what is used to evaluate your loan application and debt forms a big factor of your report. But managing debt is different for every individual as your debt could be because of different circumstances like job loss, medical conditions, etc. You can just follow these basic tips to manage your debt:

Prioritize:
Prioritize your payments; Think of paying off which debt would be beneficial to you. Decide if you want to pay off a smaller debt first or debt with higher interest first.

Negotiate:

Negotiate with your bank or creditor to lower your interest.Talking to your banks helps you as they cooperate with you for your debt payments.

Debt Consolidation: 
If negotiating doesn't work, you could look at consolidating your debt. Debt consolidation is taking one big debt with a lower interest rate or zero interest to pay off all your debts. It helps you as you don’t have to paying off multiple debts but only single installment a month.

Credit Counsellors:
If sometimes you can’t help yourself, credit counsellors can. They help you draw your budget, reduce your spending, negotiate with your banks for lower interest rates. To get best services at best prices,research well before consulting to any agency.

Settlement/ Bankruptcy:
If you have no other resort left, settlement can be the last option. In cash settlement with your credit or bank, the bank gives you a big discount for paying off your debt by a certain date in cash. If you don’t have cash for a cash settlement, then you may have to declare bankruptcy.

Settlement and Bankruptcy both negatively affect your CIBIL score  and stay on your credit report for a long time, so try to follow the above steps and try to never reach the last resort.  

contact us for a more tips : www.cibilconsultants.com
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How to Negotiate With Creditors ?

If you are struggling to make your credit card payments or to pay off other debts, it may be time to start negotiating with creditors in order to avoid bankruptcy proceedings. You need to be prepared though, as they are used to people requesting some sort of concessions in negotiations and very good at avoiding them.

Keep in mind that while you’ll only be going through this negotiation once, the person you are negotiating with probably does it for a living. That means that you need to be prepared.

The first thing that you can do is make a budget and figure out how much you can actually afford to pay your creditors. Obviously, you have to be able to cover your normal bills, and they should realize that if you are unable to do so it is impossible for you to get out of debt.

At the same time, figure out how much you think creditors may be willing to let you out of. A good rule of thumb is to start around 50 percent of the bill, because creditors will rarely let you out of much more than that. Start the process by calling your creditor and making an offer. Make sure that you tell them that you cannot manage to pay off the original amount, but can pay a percentage.

Depending on the situation, you may propose a payment plan or a lump sum payment. If your offer is rejected, you’re going to begin putting on your game face and working your way up the chain of command on the other and of the line by asking for a manager. 

If you are able to come to an agreement, make sure that you get it in writing so that you do not have any legal problems down the line. Ask them to mail you a hard copy of any agreement so that it can be signed and saved.

One thing to try to throw into the negotiations is to have your creditor remove any negative comments on your credit report once the debt is settled, which will help to preserve your credit rating.

If you get stuck at any point in the process and your creditor is not being receptive, it may be worthwhile to throw the “bankruptcy,” word out there. Creditors know that if you go through bankruptcy, they will get nothing. They should prefer your offer to nothing at all.

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