(NewsUSA) - Household debts are rising amid higher interest rates. The increase in rates is a major issue for all borrowers, at all ages and stages of life. A CERTIFIED FINANCIAL PLANNER™ professional can help you develop a strategy to manage your debts while still reaching your long-term financial goals. Here are four ways a CFP® professional can help:
It is important to recognize that not all debt is created equal. The actual interest rate numbers differ, and so do the terms. A CFP® professional can guide you through the maze and come up with a plan to prioritize which debts should be paid off first, and which allow some wiggle room.
Prepare to Pay More Monthly
Higher interest rates generally mean higher monthly payments, unless you have a fixed-rate loan, like most mortgages and car loans. To offset these costs, think about ways to tweak your budget and save money in other areas. A budget review with a CFP® professional can help you identify ways to trim expenses that you might have missed.
Step Up Your Credit Score
Better credit scores earn more favorable interest rates when it comes to debt repayment. In the long run, improving your credit scores could save you as much as hundreds of thousands of dollars. Of course, poor use of credit will add to your debt, so be sure to use credit responsibly. Choose just a few cards, be aware of your credit limits and minimum payments, and pay your bills on time.
If you are new to credit and want to build a credit history, consider cards from a credit union, or from a gas company or department store. A CFP® professional can lay out some of the credit options available to you. Don’t forget to check your credit score periodically to identify anything suspicious that might indicate identity theft or credit card fraud.
Study Options for Student Loans
Tens of millions of households face another imminent debt burden as they prepare for student loan payments to restart. Individuals with student loans have had a three-year hiatus from repayments to help manage the financial stress of the pandemic. However, payments are set to resume in October 2023. These student loan repayments can make a significant impact on anyone’s debt management plans.
A CFP® professional can help you navigate all these different factors to manage your debt and accomplish your financial goals. Find your CFP® professional today.