Tips To Clear Your Outstanding Debts

1. Set clear goals for paying off your debts

The first step to managing your debt is to find out your current debt situation. To get an overview of your outstanding and current credit scoring, purchase a credit report from Credit Bureau Singapore. From there, you can then decide on how many years you should give yourself to pay it off – but be realistic and patient, it could be 5 years, 10 years or even longer.

2. Consider debt consolidation or refinancing

Debt consolidation is a method of rolling all of your loans into one single, lower interest payment. There are two primary ways to consolidate your debts: a debt consolidation loan and a credit card balance transfer.  

A low-interest debt consolidation loan can be beneficial to consolidate multiple high-interest loans such as credit cards and personal loans. This can help to lower your accumulated monthly instalments and interest rates.

For those with credit card debt, you will find that interest rates are very high. Consolidating all your credit card debt under a single personal loan can alleviate some stress in dealing with so many financial institutions and payment deadlines. The CIMB Personal Loan stands out as an optimal option for prudent borrowers, presenting competitive interest rates, no processing fees, substantial loan allowances, and an attractive cashback offer. The application process is entirely online, designed for efficiency and can be completed in under 10 minutes. There's no requirement to download any application, nor is there a prerequisite to hold a CIMB bank account or credit card prior to application.

If you have a home mortgage, consider refinancing your home, which can lower the interest rates.

3. Set payment reminders to stay on track

Avoid being stuck with additional charges such as late payment fees by setting up a payment reminder on your phone or computer. 

4. Which debt should I pay off first?

Come into some extra funds and overwhelmed by which debt to clear first? Here are two strategies you can use: 

• You can pay off the loan with the lowest balance – thus coming closer to clearing in totality at least one loan, while maintaining the minimum payment amount on other loans. 

• You can focus on the loan with the highest interest rate, and thus lowering the interest on the outstanding, and continue paying the minimum amount on other loans.

But which option? The key is to choose the solution that works for your lifestyle and keeps you motivated to continue your debt management journey.

The most important thing to remember is that clearing your debt can take a while, so it is important to stay on track and consistently practice good funds management habits to help keep your budget in order.