Individuals dealing with debt explore multiple ways to settle them. It helps them climb another milestone without baggage. However, most individuals utilise debt consolidation to get rid of the debt faster. It involves merging multiple debt payments into a single monthly instalment. You only deal with a lender instead of paying separately. It helps eliminate high-interest debt by clocking low-interest and monthly payments. Eventually, it also helps your credit score.

Qualifying for a debt consolidation loan requires one to meet the criteria. Individuals with high credit scores, stable finances and income get instant approval. However, individuals with low credit scores face rejections. Why? A debt consolidation loan is a medium-long-term loan requiring commitment. Exceeding the credit limits and connecting with bad credit joint accounts affects approval. It reveals the borrower’s unreliability in paying the dues.

Moreover, not having assets to put forward as collateral makes it even more challenging. Thus, individuals seek other ways to streamline payments or manage debt without consolidation. If you can relate, the blog may help. It lists the strategies that may help you manage debt without consolidation.

 Ways to get out of debt without consolidation

Know the reason for the rejection of your debt consolidation loan application. It helps you prepare your finances accordingly. You can also consult a credit counsellor who may assist you with a better understanding. For example, if the rejection was due to multiple debts with low income, solve this.

You can crack this by improving income and creating a budget. Save for the highest debt payments first. It could be paying debts with the highest interest costs.  It helps you pay the debt while boosting your credit score. Here are other ways to get out of debt without consolidation:

1)     Check the debt resolution possibilities

It is the process of negotiating debt payments with creditors. Check whether they may agree for you to pay less than what you owe.  It is a possible strategy for someone who cannot afford the debt payments genuinely.

For example, unemployed individuals facing long-term joblessness may consider this.  It reduces some debt on your part. It reveals your helplessness in settling debt, and creditors may help. They may forgive some of your debts.

2)     Utilise unsecured finance solutions

In some cases, such as short-term unemployment, debt resolution may not work. The creditors may grant you a new timeline to settle debts. It implies that you still owe the creditors.  Identify the best ways to increase your income. It will help you ensure flexibility on the payment term. Alongside this, identify financial facilities that may help you. Yes, don’t be petrified with a new loan.

Instead, it helps settle the debt without stringent payment. You may spot affordable ways to pay debt. Some may not even require a third person. Get unsecured personal loans with guaranteed approval immediately. You may qualify for this extremely bad credit loan by proving your affordability. Provide an authentic income source to qualify. Individuals with part-time income claiming benefits may also get one. Identify the amount you can repay without difficulty.  You can use the amount to pay some debts at once. Analyse the total debt costs and pay it with a single loan. No, you don’t need to pledge assets for that. It is the best way to pay debts and streamline your finances better.

3)     Consider a debt management plan

 

A debt management plan can help you get rid of the debt. You can contact the debt management agencies to get help with that. They negotiate the debts on your behalf. However, they charge a fee for their services. Choosing a reliable one is the most important thing in this case. You must open up to debt and income information for the process to follow.

Ideally, the arrangement is ideal for someone who wants to settle debts within 3 years. However, they need help with organising the finances for that. If you relate and need help managing finances well, the debt management company may help.

Under this, you make a single payment to the agency. The agency distributes this money to your creditors. Some debt management companies require clients to avoid credit card usage. Credit cards are a recurring debt and, hence, unavoidable. By restricting the use for some time, you can help the company settle the debt for you.

Additionally, DMPs provide budget management advice. The best part is there is no minimum credit score to leverage the services. Thus, don’t close any credit services you receive. For example, avoid closing credit cards as it may impact your credit history. It is just about reducing the usage for the time being.

Paying debts in 3-5 years implies saving more. You would need to cover the loan payments within the period. Thus, make sure to budget sagaciously for that.

4)     Pay the minimal amount you can on utilities

Manage debts like student loans, credit cards, payday loans or mortgages. Don’t forget important liabilities. For example, analyse your monthly expenses, such as groceries, car refuelling, electricity and water bills, etc. Make a plan to settle these off. Check how much you can pay on important liabilities.

Do not forget the rental to pay by the month’s end. Prioritise the liabilities before paying. For example, identify the best ways to settle rental payments while managing other debts. If you have minimal savings to settle rent, check other options. Non-repayment on the rental may impact your agreement. It may lead to eviction.

Thus, avoid such fears by financing it despite a low credit score. You may get bad credit personal loans with guaranteed approval anytime. Guaranteed approval is for individuals with low credit but share income flexibility. It helps individuals with poor credit history get instant cash injections for critical requirements. Identify the amount you need. Avoid borrowing more if on a debt management plan. Check the possibilities for bridging payments quickly.

5)     Utilise the windfalls to settle debt

A windfall is a large sum of money that surprisingly lands in your bank account. You may win it in a lottery or a contest. It could also meet you in the form of inheritance money. However, you must pay tax on the windfall gain, you still get a good lump sum.

Instead of saving it or purchasing luxuries, pay debts. It will help you get debt-free and lead a financially strong lifestyle. Who does not want to stop the constant chase? Every little penny counts. Thus, please make the most of it while repaying the dues.

Bottom line

These are some of the best ways to counter debt and streamline finances. The tips may help you settle debts without consolidation. Individuals failing to qualify may try these tricks. However, you have to be extra conscious of expenses and financial information. Prevent your finances from vulnerability. Instead, check the best ways to manage debts individually. Personal loans are one of the best individual and confidential ways to settle one. Identify other prospects to ensure a debt-free lifestyle.