There are several ways to lower your debt in Nigeria. These include refinancing, consolidation and renegotiating payment terms. Whether it was that Wizkid or Adekunle Gold concert ticket that set us back on our financial goals for 2018, these techniques will help us to recover our finances from the excesses we indulged in this festive period.
Refinancing allows you to lower the monthly cost of items that are otherwise tough to change. If you plan on staying in your home long enough to recoup transaction fees, refinancing your mortgage to a lower rate may be an excellent way reduce your monthly obligation.
Refinancing a car or student loan to a lower rate is also an option, and many lenders may reduce the rate on the student loan if you have a good payment history.
If you have built equity in your house, a Debt Consolidation Home Equity Loan or Home Equity Line of Credit is another option. This approach allows you to replace credit card, auto loan or other high-interest debt with a lower interest rate loan.
If someone does consolidate loans through a home equity loan or line of credit, it’s important to realize that the new loan is now a secured debt. The house, in effect, backs up the loan, so it is a less-risky venture for the lender.
While consolidation may lower your monthly obligation, it’s vital to remember your total debt load has not changed, only the way you are paying it off. Continuing to use credit cards and taking on new debt could make your financial situation worse.
Here’s something you may not know: credit card companies will negotiate terms with you. Not always, but they are more flexible than consumers think.
Sometimes all it takes is a phone call to customer service to lower your credit card rate, whether it’s a fixed or variable. When you call, tell the customer service agent your current interest rate, how long you have been a customer and of any pre-approved balance transfer offers from other banking institutions you may have received in the mail.
StartCredits recommends you register for your SC score to improve your credit risk, understand debt management and access more loans.