Sometimes, debt consolidation is not the ultimate answer. In that case, try these alternatives:
1. Adjust Your Budget and Financial Habits
If your running debts are still manageable, maybe a few tweaks in your budget can do the trick. Look at your monthly expenses and cut corners when you can. For example, prepare your meals instead of eating out, avoid wasting electricity, buy generic brands instead of branded ones, etc. By making these adjustments, you can use the savings to pay off your bills and loans.
2. Get Refinancing
Refinancing involves taking out a new loan to settle the outstanding loan. This strategy is useful when the interest rate is low and you want to take advantage of it. Refinancing is a common tactic in paying off a home loan. However, you’ll need to cover some costs to avail of this program.
3. Apply for the Credit Card Amnesty Program in the Philippines
Also known as the Interbank Debt Relief Program (IDRP), the Credit Card Amnesty Program is a repayment plan that rolls together and restructures your credit card debts. It makes repayment easy through affordable monthly amortizations and low interest rates. With the IDRP, the maximum interest rate is 1.5%. Repayment terms can reach up to 10 years, but such tenors usually apply to extreme cases. This program is managed by the Bangko Sentral ng Pilipinas (BSP) and member banks of the Credit Card Association of the Philippines (CCAP).
