8 Ways to Negotiate DebtsUncategorized
Debt negotiation is not a very pleasant task, but it is possible to make it more comfortable and profitable for your pocket. We will tell you 8 tips that will help you prepare for this moment!
It is a fact: here in Brazil, people are increasingly having difficulty paying their bills on time and are becoming indebted. In 2019, the proportion of households with overdue accounts or debts rose considerably.
According to a survey by the National Confederation of Trade in Goods, Services, and Tourism (CNC), in May 2019 the percentage of indebted Brazilian families reached 63.4%, an increase of 0.7 percentage points (pp) compared to April (62 , 7%).
The biggest arrears are debts with banks , followed by commerce and communication companies. In addition, the causes were pointed out for this entire default scenario:
- Postdated check;
- Credit card;
- Store booklet;
- Personal loan;
- Provision of car;
- Provision of insurance.
And compared to the previous year, you can see where Brazilians are missing out on financial planning:
This scenario is worrisome, so we decided to raise 8 tips super relevant to those who want to start debt renegotiation today . Ending them means more financial peace of mind for you to realize dreams and less headaches in everyday life.
Our goal with this post is to help you negotiate debt smarter and more planned, so you won’t get in trouble during and after the negotiation. So let’s understand how to negotiate debt efficiently and get rid of debt in your life once and for all?
1. Take stock of your finances
It’s no use drowning! To settle debts, it takes time to set up good financial planning. Putting all the debts of the month, your income and the outstanding debts on paper is the beginning to understand what the best deal for your pocket will look like.
This is because it is no use trying to renegotiate your debts without knowing how much you can commit your budget in this negotiation.
A budget restructuring will dictate how much you will commit from this money, whether you need to make some savings or even change some habits.
We have prepared an uncomplicated personal budget spreadsheet that will help you in this first moment.
2. Define how much you can afford to negotiate
Once you understand your financial situation more clearly, you can define how much you can afford to pay off debt once and for all.
Wanting to negotiate debts to get rid of them is important, but don’t commit too much of the income to the installments you can’t meet. If this happens, it is even more difficult to reach a new agreement.
In planning, consider unforeseen and do not compromise more than 30% of your income with large accounts!
3. Set priorities
It is extremely important that you rank all your debts and list payment priorities.
Higher interest accounts like overdraft and credit card should be prioritized as they are the two credit lines with the highest interest rates on the market.
Financing should also be a priority on the list, as material property is usually left as collateral and nonpayment can cause you to lose some of it to the bank or financial institution.
4. Try to negotiate a discount
If you really want to negotiate efficiently, define in advance what your debt repayment proposal will be.
Keep in mind that with a well-structured proposal you will be able to set your terms, which interest rate you deem fair, the deadline for repayment and the discounts according to the payment format.
Other debt negotiation options are:
- Interest withdrawal;
- Interest rate improvement;
- The disregard of fine;
- The dilution of the parcels.
If you can repay the debt in sight, remember that your bargaining power is even greater.
5. Formalize the negotiation
Whoever you are, if debt renegotiation is in person or online, make it clear that you are creating a written document to formalize what was agreed during the conversation.
That’s because there’s no point in you doing a super deal and not having something really tangible that both parties will stick to the deal.
When you negotiate in writing, both parties seal an appointment and guarantee the conditions discussed during the meeting between the indebted and the lender.
6. Evaluate the contract well
A common practice that can be extremely harmful is to evaluate and read the full contract before signing, especially in debt renegotiation .
As it is in the contract that all the rules of negotiation stay, not reading can be a big problem for you in the future.
So, evaluate each line thoroughly before signing to ensure all the benefits agreed between you and the lender. If possible, have a lawyer to validate the information with you and validate the notary agreement for even more efficient formalization.
7. Take care of new offers
Many companies offer new product or service offerings at the time of renegotiation.
However, offering credit cards, some type of insurance or capitalization bond at the time of trading in exchange for a lower interest rate is extremely prohibited.
In addition, if placed on the tip of the pencil, you can lose your discount by paying another product to the bank or financial institution. Try to stay focused on negotiating your debt and then think about getting new expenses.
8. Make a smart trade
Whether paying a debt to the bank or an individual, often having the cash in hand and making the cash payment is the best way to bargain discounts and gain more advantage in trading.
In this case, getting a healthier loan can be one of the most advantageous options as it is possible to exchange all your expensive debts for a cheaper one and, as a result, leave your income less compromised.
Modalities such as Property Guarantee Credit (CGI), for example, have lower interest rates and can make a difference in keeping your bills up to date .
Another advantage is the extended payment period, in which installments can be paid up to 180 months, once approved, the money falls into your account within 10 days.
Plus, you will be able to breathe a sigh of relief because the rates are the lowest in the market and never change, they are always the same. Unlike banks or companies where interest rates are rising higher and suddenly a snowball.
At Lifecredi, we settle your debts – yes, you do everything around here in a swift way – and deposit the rest of the loan amount into your account.
That is, you can borrow more than you owe and invest the other party in your dreams of traveling , retiring or investing in a new business . Much easier and without bureaucracies.