The expert listed five steps to get rid of debts on loans – Rosbalt

To solve any financial problems, it is necessary, first of all, to analyze your budget, current, planned and possible income and expenses, because without understanding where the money goes, it is almost impossible to deal with debts. Maxim Kvasha, an expert at the Center for Financial Literacy of the NIFI of the Ministry of Finance of the Russian Federation, spoke about this in an interview with the PRIME agency.

According to him, often this alone is enough to noticeably improve the financial situation. Detect unnecessary expenses, overcome wastefulness, abandon bad habits. On average, you can save 10-20% of your income every month on this. And for a person with debts – to use these funds to pay off loans.

The second step could also be the first, to try to increase revenues. Achieve salary growth, find a part-time job, rent out empty real estate, sell something unnecessary, the expert advises.

“And if this worked out, then you need not spend more, but use these funds for savings, or better, for accelerated repayment of loans. And live in this mode for at least a few months or even years – until the debt load stops bothering you, there will be some comfortable savings, ”Kvasha said.

The third step, he said, is to look at the terms of the loans. For some of them, interest rates are higher (usually consumer loans, credit card debts and, alas, loans in microfinance organizations), for some lower (auto, mortgage, educational, loan within the grace period).

Common sense dictates that you pay off the most expensive loans first. They are usually the shortest, Kvasha emphasized.

In his opinion, now this universal rule has become even more relevant. The surge in inflation and the rise in interest rates has led to the fact that it has become not so expedient to quickly repay long-term loans taken at relatively low rates.

“What, for example, is the point to quickly pay off a mortgage at 7% if savings can be placed at 9%?”, The expert remarks reasonably.

However, he admits, sometimes a fourth step is needed – the restructuring of loans. Combine all or most loans into one – many banks now offer this service. It will become more convenient, however, according to the specialist, it’s not a fact that it’s more profitable, and it’s not a fact that it will work out – rates have increased, and borrowers with imperfect credit history have become much more suspicious than before.

And finally, the last step concerns discipline. It will take a lot, warns Kvasha.

“And carefully keep a personal budget, and save, including on trifles, and earn extra money, and methodically try to sell what is unnecessary, and every month give a significant part of the income to the bank,” the expert summed up.