subject: Legal Ways To Achieve Zero Debt Easily [print this page] All of us may not be lucky enough to be born with silver spoons in our mouths. A common man has many responsibilities in life. He may have to take out several loans to cater to his day-to-day needs. Sometimes it is very difficult to pay back the loans on time. This is when he finds himself in a fix. However, there are some legal ways to achieve a zero debt condition.
The term 'zero debt' means a process of achieving financial independence. You achieve zero debt by managing your money efficiently without outside assistance. But how will you know that you are experiencing zero debt? Zero debt can be determined simply by calculating your debit to credit ratio. By credit, I mean the money in your bank accounts and the equity in your home. The debt means the loans that you have taken from the banks, your friends and other financial institution. If your credit level is high and the debt is negligible, then you are experiencing zero debt.
So what should you do when there is not enough money in your bank accounts and in the equity of your home? You will have to manage your finances. Compare your sources of income (such as your salary, pension or revenue from the business you run) with your debts. You can not consider financial aid from your friends as a source of your income.
To achieve zero debt, you will have to rein in your expenses. You will have to cut your unnecessary expenses such as the money you spend on your entertainment or for maintaining a luxurious life style. You will have to sacrifice your luxurious life style at least until you achieve a zero debt level. The money you save by slashing your expenses should be used to pay down your debts. You should also put aside some money every month for paying off these debts.
If you have several loans whose interest rates are high that can't be paid easily by these simple measures, then you may want to try debt consolidation. The concept of debt consolidation involves paying back several loans by converting them into a single loan. The debt consolidation loan may be taken for a longer term than the original loan with a smaller amount to pay as the monthly installment. Having a single monthly installment to pay by using the debt consolidation option can help you achieve a zero debt level easily. Many financial institutions offer inexpensive debt consolidation loans. Usually the debt lending financial institution asks for security from you. The secured debt consolidation loans are cheaper than unsecured debt consolidation loan.
While estimating the amount of debt consolidation loan you need, you should include all your present debts such as education loans, home loans, credit card debts and utility bills. The debt consolidation loan may help you ease your way to achieve zero debt as you pay only for a single loan at reduced interest rates. You may find better debt consolidation loans in your city. You should spend some time researching online for the best deal to achieve zero debt and to enjoy financial freedom.
