It is common that over the years we have to apply for some type of loan. For example if we want to buy a home or buy a vehicle. In addition, loans help us to pass complicated economic situations in a timely manner.
If we request these financial aid with a head, they are exceptional tools to have a healthy economy. However, the situation can get considerably worse if we end up acquiring too many credits. In those cases we can end up in debt.
So that this does not happen to you, the Pointed Credit experts have wanted to offer you in this article some tips to avoid overindebtedness. Would you like to meet them? In that case, read on.
Differences between indebtedness and over-indebtedness
Just as it is usual today to apply for several loans, it is also to acquire them without taking into account our response capacity and the previous credits that we have already assigned. This situation, sooner or later, ends up leading us to over-indebtedness.
Debt does not have to affect our financial situation. It is normal that we do not have enough capital to be able to afford certain products directly. Such as buying a flat.
- Indebtedness We must always control our ability to pay and not exceed 40% of our monthly net salary with our debts. Acting in this way we will face an easy debt to cope with and that will not affect our family economy.
- Overindebtedness The problem begins when we begin to acquire debts above our repayment possibilities. In those cases we will end up over-indebted and need more loans to be able to pay the previous creditors.
How to avoid overindebtedness
The best way to avoid overindebtedness is to have adequate financial education. Here are some tips you can put into practice to avoid it.
- 1. Have all our debts controlled. If you are thinking of applying for a new loan, before doing so you must make sure you are clear about how much money you owe. Analyze previously the debts that you have already acquired to know if you can cover one more payment each month.
- 2. Know our real budget. For this it is necessary that you have clear both your net income and the fixed expenses that you must face each month. The difference between them will give you the amount left over to acquire new loans or dedicate that money to saving.
- 3. Cut expenses and know what our priorities are. In case our economy is about to explode, or we have already overextended, it is necessary to conduct a thorough study of our current economy. Review your financial priorities and cut expenses on all the items you can. In this way it will be easier for you to do debt debts.
- 4. Go to debt refinancing. If you are in a very extreme situation, the best solution to get out of this economic situation may be debt refinancing. In this case, what you have to do is go to a financial company, such as Point Credit, to unify all your loans into one. For this, it will be necessary to cancel the previous ones and create a single new loan that amounts to all the capital you owe. This way you will get a single smaller fee with which you can take on the payments. Always avoid falling into default.