Debt Consolidation and 9 Other Debt Repayment Strategies

Debt is a necessary evil for most people. Unfortunately, you will find that not everyone gets into debt by planning to take a loan and having a repayment plan. For most people, running into huge debts is a result of poor planning, financial misfortunes, and living beyond one’s means. For most of these cases, the problem recurs especially when the root cause of the problem isn’t identified and weeded out.

You may think that debt affects individuals and households only but the truth is that it affects businesses too. By spending too much on overheads while making poor investments, the company will most likely run into debt. Below are some of the debt management or repayment strategies:

  1. Creation of budgets

Everyone should know how to create a budget and if you don’t, then you should research online or even get a personal finance consultant or a credit counsellor who will guide you through the process of creating the budget.

There also are budgeting apps you can take advantage of and if you don’t fancy the apps, try out the traditional Excel spreadsheets. You will find that there are many miscellaneous expenses eating your income and savings resulting in debt.

  1. Deal with the high-interest debt first

The problem with a high-interest debt is that it puts your finances and your business into a high risk. These debts also take the biggest chunk off your income and can easily deplete your resources. If you have credit cards and one of them has a high interest repayment rate, you should pay it off before the rest because it increases your payment on the credit card with the highest APR. This will happen as you go on paying offthe debts with lower interest rates.

Student loans are often low interest debts that can be easily repaid once the high-interest credit card debts have been repaid. In some instances, it is allowed to transfer the student loan balances to the zero interest credit cards.

  1. Don’t brush off balance transfers

The most effective way of reducing your debt is by taking advantage of balance transfers. In most cases, the transfers are available for credit cards. Most credit card transfers are zero-interest rate transfers for balances and you can use this for the card with the highest interest rate on debt. You will be given a limited repayment duration during which the zero-interest rate is applicable. Take advantage of this to repay all your debts then.

  1. Always pay more than the minimum balance given

To reduce your debt significantly, always strive to pay more than what the minimum balance is on the monthly bank or credit card statements. When you do this, you get to prolong the payoff strategy. Whenever you can pay off the cost of the new office equipment with more than necessary monthly, do so. This strategy gets you out of debt faster.

  1. Debt consolidation

Is your company having many creditors to deal with monthly and is it becoming tougher to deal with all the debt monthly? Debt consolidation is a debt restructuring program that takes up all your current debts and repays them when you take up one loan to service. Instead of servicing many debts and dealing with several creditors sending you different invoices monthly, go for debt consolidation.

Fortunately, there are many debt consolidation firms around you with programs that suit you. With debt consolidation loans made easy, you can rely on the debt consolidation companies and credit counsellors for the best and the cheapest loans. You should however take your time researching on consolidation rates and fees. Don’t fall into scams and ensure that the company is certified and with verified positive reviews.

Debt consolidation is suitable for loans, mortgages, car loans, personal loans, student loans, outstanding bills, rates, taxes, etc.

  1. Debt settlement

Are you struggling to repay all your creditors who are out for blood? Perhaps you should take up debt settlement as a way to repay the owed amounts. Find a debt settlement company, talk to a credit counsellor, and determine how much you can save up monthly.

The debt settlement company will negotiate with your creditors and have them agree to a one-off payment of a percentage of the owed amount. You will contribute to an account set up by the debt consolidation company monthly.

  1. Cut down on spending

The cause of too much debt is unnecessary spending. To repay your debt and have a little extra money in your savings account monthly, you have to cut down your spending. Spending hurts your credit and your income significantly. Only buy what you need and avoid splash shopping. Stop carrying your credit cards around and save more. Practice frugality for financial freedom.

  1. Don’t waste your bonuses

Yes, you have earned the bonuses received, but when you have so much accumulated debt, it is important for you to consider using the earned work or project bonus on paying off debts. You may use the loan to pay off equipment debt, accrued leases, or even a student loan. Lump-sum payments attract discounts in most cases.

  1. Sell off unwanted items

Most of the things you buy are totally unnecessary. If you want to finish the year without any debt, spare the weekend and declutter. You will be amazed by the number of high-value but unnecessary items in your office or home. Auction these items online or have a garage sale. There are friends or acquaintances that may need the items, so sell them off and use the money to reduce your debt.

  1. Try micro-lenders and online lenders

If your business is in dire need of financing, but you have a poor credit history and score, you may consider micro lenders and online lenders. There are many legitimate lenders online or around you but you must research first.


In conclusion, there are many options for debt management but their effectiveness depends on your decisions and your willingness to stick to the programs. You should also change your habits, cut down spending and for a business, this might mean downsizing or allowing workers flexibility in working thus they can work from home and you won’t need a lease.