Having debt is normal. However, if the existing debt is left alone so that the existing interest becomes even greater, this is the right time to look for ways to pay off the debt.
If you are one of those people who are in deep debt and plan to pay it off soon, the following method will be perfect for you!
How to Pay Off Debt Well and Correctly
To meet their daily needs and start a business, not a few people choose to take on debt and wash it off gradually so that the financial flow becomes smoother.
However, there are also some people who, when they have debt, want to pay it off immediately or do not want to be in debt for a long period of time. If you are one of them, here's how to pay off debt properly and correctly in the style of BFI Finance.
1. Reset Expenditure Post
Rearranging expenditure items can help you set aside more budget funds to pay off existing debts.
Routinely monitor and evaluate incoming and outgoing financial cash. If there are expenditure funds that are deemed unimportant and cause waste, then these expenses can be trimmed and diverted to pay debts.
Separate needs from wants. You can also start frugal living or frugal living from now on. This will have a huge impact on your expenses.
2. Debt Recapitulation
Making details or recapitulation of all debts you have can be a way to pay off your next debt.
The recapitulation must be accompanied by the remaining debt, interest rate, term of the debt, and the priority of the debt to be repaid. This can help you pay off debt well by setting a priority scale regarding which debt should be repaid first.
3. Use Savings
If you have extra savings or an emergency fund, you can use the savings you have provided you don't use the entire savings to pay off debt.
When you use all of your savings for debt, you will find it difficult to get additional funds and potentially have debt back in an emergency.
4. Take Over Credit
This method of paying off debt is quite practical but very risky. Because, by taking credit, it means that you agree that the collateralized assets are sold to pay off the remaining debt.
5. Selling Assets Owned
If the take over credit option is deemed too burdensome for you or even unable to cover the nominal debt you have, another way to pay off debt is to sell the assets you have.
There are many valuable assets that are quite easy to sell such as gold, diamonds, motor vehicles, land, houses, and so on.
6. Pay off Debt with the Most Interest
The interest contained in debt is indeed quite burdensome, especially for debt owners. The reason is, the amount of interest that exists will have an impact on the financial cash flow you have.
However, if you are determined to immediately pay off the debts you have, you should hurry to pay off the debt with the highest interest first. This will make your burden lighter.
7. Preloved Items That Are Not Used
In addition to selling the assets you have, you can also sell items that are no longer used as a way to pay off debt. The term most often used for this activity is preloved.
For example, you can open a thrift shop specifically for items that you have used before. For example, cooking utensils, clothes, home decorations or ornaments, and much more. Make sure these items are still in good condition and fit for use.
To make it easier for these items to sell quickly, you can offer them online such as by posting them on social media or marketplaces.
Image Source: Pexels/bangunstockproductions
8. Avoid Bad Habits of Digging Holes Close the Hole
Many people assume that we can pay off debt easily if we cover it by borrowing other funds. This practice is called digging a hole cover.
Although it seems effective, in fact, this is a way to pay off the debt that is wrong and fatal. Instead of the existing debt being completed quickly, you actually have the potential to add new problems again which in the end the debt you have is never really paid off.
9. Seek Professional Help
If you are confused about how to set the right strategy regarding how to pay off debt, asking a professional for help can be another option.
Most importantly, make sure to choose a practitioner or institution that has official legality, is trusted, and is supervised by the government.
10. Find Extra Income
Looking for additional income is a wise way that you can try. Especially if you feel that your monthly income or assets that have been sold are not enough to pay off the debts you have.
To earn extra income, you can offer expertise in the service sector. For example, being a private tutor, consulting services, entrusting services (jastip), online motorcycle taxis, photographers, article writers, and so on.
Not only that, but you can also start a business with minimal capital such as becoming a reseller, drop shipper, or opening a jastip.
11. Starting a Business with Low Capital
Not only selling services from the expertise you have, you can also get additional income by opening your own business as a way to pay off debt.
One of the right steps you can take to start a business is by applying for a loan in the form of productive debt.
What is productive debt? Productive debt is a type of debt that is used to purchase assets or goods whose value will increase in the future.
So, when the existing credit has been paid off, you can feel the benefits of the transaction in the future. For example, business capital, education costs, and home ownership loans (KPR).
Well, for those of you who are planning to open a business and need additional capital, you can apply for a business capital loan at BFI Finance. BFI Finance has been verified by OJK. By applying for a loan at BFI Finance you will get various benefits. Including the following.
Disbursement of funds up to 85% of the value of the vehicle and a tenor of up to 3 years.
Loan funds with a fast process and a maximum tenor of up to 18 months.
Low interest starts from 0.9% with a long tenor of up to 48 months.
Sobat BFI, here are some tips that you can do to pay off debt quickly in the style of BFI Finance. This way of paying off debt quickly must also be done with strong determination and intention.
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