8 Tips to Know How to Negotiate Debts and Don’t Get the Name Dirty
December 14, 2019
Everyone, at some point, is subject to financial turmoil. Whether due to an unforeseen event or even because you did not control finances as you should, you have contracted market debt.
The situation is not the best, but it has a solution. Just be determined to negotiate with creditors and get financially organized so this situation will not be repeated.
Here’s the step-by-step that explains how to negotiate questions so as not to get a dirty name:
1. List all questions
To know how to negotiate debts, first of all, you need to know what they are. List everything you owe, not forgetting to write down the values, the dates and who the lenders are. With this list in hand, contact each lender directly and find out what the amount of debt is in sight so you can pay it off for a more affordable amount.
2. Refer to Credit Protection Bodies
To learn how to negotiate debts and not risk discovering that you have a dirty name on the market when making a purchase or applying for funding, it is important to consult with the protection agencies. or credit, such as SPC and Serasa Experian, to find out if any of the lending companies have messed up your name. If so, contact the company as soon as possible to negotiate debt and clear your name.
3. Review monthly spending with the help of the 50-15-35 rule
Who is wondering how to negotiate debts, one of the best ways is to review monthly spending with the help of the 50-15-35 rule. It works like this:
- 50% of income should be allocated to essential expenses, such as rent, health plan, condominium, school tuition;
- 15% is reserved for financial priorities. In your case, it will be to settle debts. When finances are balanced, this amount can be reversed to savings, for example;
- The remaining 35% is earmarked for lifestyle expenses such as leisure, shopping.
4. Start by renegotiating the highest interest debts
Debts on overdraft and revolving credit cards are usually the ones that charge the highest interest rates on the market. Therefore, the best possible attitude is to start renegotiation for them.
5. Analyze if the parcels fit your budget
There is no point in renegotiating your debts if the installments charged by the lending company do not fit your financial budget. Only accept installments that you can really afford and seek the lowest interest. The RightOne Bank has a calculator that can help you make this calculation.
6. Use all extra money to pay off debts
It’s no use having money saved and paying high interest on debt. If you have any extra money available, use this amount to settle your debts and evade interest.
7. Save money to pay installments
It may happen that one of the lending institutions does not accept renegotiation. In this case, it is important that you save the money that would be intended for the payment of the installments. In the future, there is a chance that the company will look to you to pay off debt and offer part of the value in sight.
8. Create an Emergency Reserve
After renegotiating and settling debts, it is time to create an emergency reserve so that you are no longer hostage to adversity. The amount varies according to the possibilities, but the ideal is that it corresponds to 10% of the salary.
Now that you know how to renegotiate debts, it’s time to get your hands dirty and balance your finances.