mishandling debt

How People Mishandle Debt Repayment

Living with debt is an epidemic in the United States.

On average, an American has nearly $93,000 in consumer debt which includes credit card accounts, student loans, and mortgages. Poor financial literacy and a chronic mishandling of finances contribute greatly to debt.

Mishandling debt repayment can dig a debt hole even deeper. Here are some of the common ways people mishandle debt repayment.

Mistakes People Make When Repaying Debt

They Don’t Pay Down High Rates First

Credit card debt is arguably the most common form of debt, and it can be a challenge to map out a plan to address what is owed.

Many financial advisers say that first making a minimum payment on credit cards and then repaying what you can on the highest interest-rate card is the most cost-effective approach to credit card debt repayment.

Studies have found that people too often focus on cards with high balances instead of those with high-interest rates, an easily fixable mishandling of debt repayment.

They Don’t Know Exactly What They Owe

Before you can make a debt repayment plan, you should know exactly how much debt you need to repay. Take some time to outline all of your bills and associated debt amounts. That should shed a little light on what you want to target first within your debt repayment plan.

They Have A Debt Plan That’s Not Manageable

Debt repayment almost always takes a good chunk of time — and that’s OK. It’s admirable to go for a plan that pays off debt as quickly as possible, but that may not be a realistic approach. Instead, develop a plan that reflects your income, total debt, and total expenses each month.

Also, consider your separate financial goals. You may need to also devote your resources to a savings account or emergency fund.

They Don’t Adjust Spending Habits

While you target paying down debt, be sure to mostly spend money on what you need rather than want. Most of your expenses should go toward categories such as rent, utilities, and food, and less should go toward the little extras, such as going out to eat or vacations.

And do not make any big purchases as you begin a debt repayment plan unless they are completely necessary. It’s not the time to take on additional debt.

mishandling debt title graphic

They Forget To Pay Bills

How many bills do you get in a month? Is it 6? How about 10-12? More like 15 or more? The larger numbers are quite common these days, and it’s difficult for many to keep up.

If you have bills that do not provide an automatic payment option, consider an app or a web platform that keeps track of your bills and lets you know when they are approaching. They can also send you a reminder on the day they are due.

They Don’t Explore All Options

There’s absolutely nothing wrong with seeking assistance with debt repayment. There are many charities, grants, and government programs that may help if you qualify. Most are geared toward low-income individuals or families.

Other options include using a reputable credit counseling agency such as the Consumer Credit Counseling Service, a national program that operates through local organizations.

It is also worth your time to check whether you may qualify for debt consolidation, which may lessen your overall debt load and create a more manageable monthly debt repayment plan.

One Option Is A Title Loan

Credit counseling agencies can work with you to create a more effective debt repayment plan, but they cannot foresee a financial emergency.

It can feel deflating to do so well with your debt repayment only to have a huge roadblock in the form of a financial emergency. Financial emergencies such as necessary last-minute travel, vital car, and home repairs, or an emergency room hospital bill.

A title loan may help when emergencies strike so you can stick to your debt plan as closely as possible.

A title loan uses your vehicle’s title as a form of collateral in exchange for a loan amount you qualify for. It is typically paid off over time and you can keep your car and drive as usual during the loan period. A title loan is particularly quick and easy to qualify for.

A loan of up to $15,000 is available in as little as 30 minutes for those who qualify at Delaware Title Loans, Inc.

We’ve worked to streamline the title loan process. Just fill out the online loan form, chat with one of our representatives over the phone, and then bring the required items to a location near you. You can get the cash you need as early as the very same day.

Get Started Today

To avoid chronic mishandling of debt repayment, it pays to consider all of your options. To pursue a title loan today, start online, give us a quick call, or take advantage of face-to-face help at a Delaware Title Loans, Inc. location near you.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Louis Tully

Louis Tully is a full-time finance writer offering financial expertise to everyday consumers. He understands the core values of finance and used his writing talents to share his own experiences with money to his readers. His articles teach how financial failures can easily become successes by making new habits and creating realistic goals.