It is that time of the year when we eye new hopes and beginnings in life. Being debt-ridden not only hinders your mental peace and quality of life; it also hinders your overall growth and progression in life. With the advent of the New Year, you must plan a debt-free future.

Whether you have accumulated more than what you could afford repaying every month or need urgent funds to meet a social or financial obligation; you can improve your credit situation with little planning. Here in this article, we have compiled a step by step information to help you become debt free in 12 months.

1. Access your credit situation

Pull out your free credit report from any of the top credit bureaus such as Experian or Equifax. Study each credit account and make a sum of the total outstanding on a diary. Also clearly note down the monthly repayment burden and how much you have committed to repay as Loan interest. Besides note down all resources of income you currently possess. Also, make a list of assets and savings you hold. Do not forget to include any residual income you have been receiving as rent, interest or more.

2. Outline the biggest hassle

After accessing your financial situation, you could clearly outline the gap between your expectations and the reality. You know how much you are falling short of. Accordingly, you can plan events to become debt free in 12 months. Loan broker can help you find the available 12 month loans in the market according to your repayment capacity.

3. Refinance or consolidate loans

The broker can help you find a tailored loan according to your credit situation. Herein you should target to make your financial obligations affordable. If the burden of debt is enormous and you want to get rid of debt within a year, consider getting rid of white elephants. For example: if there is a secured loan such as car loan, why not just get rid of it. The asset will take care of the debt and you can plan repurchase after clearing your credit report.

Different loans can be taken care of in different forms. If you have a mortgage, you can consider raising the second charge as home equity loan and consolidate your debts or refinance the financial obligations. A broker would help you select the most affordable loan to ease the cash crunch. Picking the right loan is one of the most important steps to clear the credit hassles.

4. Have a strict Budget

As you plan to become debt free in 2018 it is important to have a strict budget. You need to monitor your expenses. Whether it would cost you lifestyle habits or involve frugal living you need to stay on this budget till you repay your loan successfully as per the schedule.

5. Execute the plan

As important it is to have strict plans as is the execution. You need to keep a financial report card for your success every month. Make small goals and aim them every day to execute its success in the long run.

6. Work on Back up

When you live on a strict budget, ensure that you save regularly for the reserve fund. Having a reserve fund ensures timely repayment every time. Small financial glitches are less likely to hamper your repayments ever.

7. Repay and Thrive

Following all these points you can successfully repay the loan in 12 months and embrace a stress-free blue sky in 2018.