This is the second article related to how to pay your debts with low resources, if you have not read the other, the link is at the end of the article.

Step 5: Start tackling bigger debts
Once you've paid off the smaller bills, there are several approaches you can take to deal with the larger debts. We recommend the debt avalanche method, in which the minimum payments are made on each bill, and then the remainder is used to pay off the debt with the highest interest rate. That interest adds to your debt each month, so if you avoid the worst of bills piling up, you'll put the money back in your pocket.

With this method, you keep more of the money you earn each month, which in turn increases your ability to make payments on larger debts.

Step 6: Look for ways to earn extra money
If you're still struggling with how to pay the debt With no money, look for ways to make more money. For better or worse, the "gig economy" has created many opportunities online, from dog sitting to ride-sharing to graphic design. Find creative ways to maximize your free time, but develop the discipline to always put that extra money into your debt.

Read More: How to pay your debts with few resources, Part 1

Step 7: Explore Debt Consolidation and Relief Options
If interest keeps piling up and you find it difficult to stick to your budget and juggle multiple payments, explore debt consolidation options first and then, as a last resort, debt relief.

Debt consolidation is usually just a personal loan that pay your debt outstanding and combine the balances into one payment to your new lender. Ideally, the interest rate on your debt consolidation loan should be lower than some or most of your outstanding balances, making the loan not only more convenient, but also more profitable over time.

On the other hand, debt relief or "debt forgiveness" companies offer to negotiate with creditors on your behalf, trying to convince them to lower the amount of money you owe. Before doing so, they often urge you to stop making payments altogether, as a way of applying leverage to convince the creditor to accept some payment instead of nothing at all. While this strategy may work, it is also guaranteed to negatively impact your credit score. As such, debt relief and forgiveness services should always be your last resort.

This is the first article in a 2-part series on how pay your debts with low resources, we invite you to join us.

Step 1: Stop taking on new debt

If you borrow money from one source to pay off another, you're really just shuffling the debt instead of paying it off. There are good reasons to do so, like opening a new balance transfer credit card to take advantage of an introductory period of 0% APR, or consolidating your debt into a personal loan with a lower interest rate. But in general, when it comes to Pay a debt, You have to stop assuming new debts. Don't open new credit cards or take out loans unless there are strategic reasons to do so, and freeze all unnecessary spending.

Step 2: Determine how much you owe
If you're overwhelmed with debt, it's tempting to ignore the bills that keep coming. Facing what you owe can be intimidating, but if you're going to pay it, you need an exact number. Sit down with every outstanding credit card statement, medical or utility bill, and add up what you owe. Next to the principal balance, write down the interest rate, late fees, and any potential penalties you may have to pay. Without a clear picture of your financial situation, it's impossible to figure out how to pay off debt on a low income.

Step 3: Create a budget
A budget allows you to see exactly where your income is coming from and where it is going. Start by listing all of your sources of income and all of your fixed and recurring expenses. Fixed expenses are items like rent or car payments that don't change from month to month.

Now, subtract the difference between your total income and your fixed expenses. The rest is the money you have available for variable expenses, like groceries and clothing – and your debt.

Read More: Specialists point out the secret to financial tranquility

Figure out exactly how much money to set aside each month for variable expenses you can't cut, like groceries, and then put the remaining money toward paying off your debt. Put a line item in your budget for the debt payments, stick to it and increase the amount whenever you can.

Step 4: Pay off the smallest debts first
After adding up everything you owe, the total number might seem intimidating. Getting out of debt on a low income isn't easy, but celebrating small milestones along the way can keep you going, and reducing the total number of creditors will ease your anxiety.

Start by paying your smallest bills. Take care of the balance of $200 at the auto repair shop, or on a credit card. Seeing those balances hit zero will give you the pride and belief that you will eventually be able to live debt free, and pay off more of your ledger accounts faster than if you had tackled the biggest debts first.

If a personal loan consolidation doesn't work for you, there are several ways to consolidate the debt, including:

Home Equity Loan
If you own your home and owe less on your mortgage than the home is worth, you can take out a home equity loan and use it to pay off your outstanding debt. A home equity loan is a type of second mortgage that allows you to borrow against the equity in your home. You can use the lump sum you receive from your home equity loan to pay off all your outstanding debts and then make a monthly payment to pay off the new loan.

For home equity loans, your home is considered collateral. As a result, the lender views your loan as less risky, which means interest rates are typically lower compared to so-called unsecured loans, such as personal loans. But keep in mind that if you miss or miss your home equity loan payments, you could lose your home. Estimate the equity in your home to see if you would qualify to borrow enough to cover your debt earring.

Balance Transfer Credit Cards
If you have a few different credit card balances that you want to manage, you could try a balance transfer credit card. Many cards offer 0 percent interest for a set period of time, usually between 12 and 21 months.

This is a good way to move all of your outstanding credit card debt down to a manageable payment each month. Keep in mind that if you have a lot of credit card debt, you may not be approved for a balance transfer that is the full amount you need to move. This means you could be paying off the balance on your new card, as well as any cards that couldn't be transferred.

Read More: How to pay off your debts and start the year off on the right foot

administration plan debts
If you don't qualify for a new loan or credit card transfer, you may have to manage your debt in a different way. If you haven't already, start by organizing all your outstanding debts into a spreadsheet. Write down all the lenders you owe money to, your current interest rate, how much you owe, and your monthly due date. From there, you can try a couple of different debt management plans:

Debt snowballing: This method allows you to focus on paying off your debt first. debt smaller. By making the minimum payments on each debt you owe, you would put all your extra money into the debt with the lowest balance. Once that's paid off, you'll focus on putting all the extra money on the next lower balance. Do this until all your debt is paid in full. The advantage is that you will see results quickly. The downside is that you could end up paying more in interest on other debts that charge higher rates.

Debt Avalanche: This method focuses on paying off the debt with the highest interest first. You would make minimum payments on all your debt obligations, and then you would put all your extra money into the debt with higher interest payments. Do this until the debt is paid off, and then move on to the debt with the next highest interest rate until all of your debt is paid off. Although you may save more by paying off debt with higher interest, you may not see results as quickly as with the debt snowball method.

Conclusion
A personal loan could be a great way to consolidate your debt. But it's not necessarily the right method for everyone. Review your individual debt situation and see if a personal loan would work better. If not, try different methods such as a balance transfer, a home equity loan, or a debt management plan to control your debt.

Paying off debt can be overwhelming, especially when you have many types of outstanding debt. If you want to expedite the process, consider getting a personal loan for debt consolidation.

Managing all of your outstanding debt, with multiple due dates, interest rates, and minimum amounts due, is a lot to consider. Missing a payment can lower your credit score and hurt your chances of borrowing money in the future.

That's why turning all your monthly bills into one payment with a new debt consolidation loan can be a great way to simplify your financial life, keep your credit strong, and make it easier to pay what you owe each month. Of course, you should continue to pay all your bills on time until you've simplified your payment setup with your new loan.

What is a personal loan for debt consolidation?
Debt consolidation with a personal loan is when you use a personal loan to pay off all your credit cards, loans, and other outstanding debts and then make a manageable payment toward your personal loan until it's paid off.

If you have many different types of debt, a personal loan can help you keep them up to date. Falling behind on any of your payments, whether it's a credit card or a student loan, can ruin your credit score. It can also hinder your chances of borrowing money in the future.

When should I get a personal loan for debt consolidation?
Having high-interest debt, like credit card debt, can make you a good candidate for a debt consolidation loan. Personal loans tend to have credit cards. You could be a good candidate for a personal loan if:

You have strong credit: The better your credit, the more likely you are to qualify for a loan with the lowest interest rate available. The lower the interest rate, the less you will have to pay on top of the money you borrow.

Read More: When is it a good idea to get a personal loan?
You have significant – but controlled – debt: If your debt is large, but you can make at least minimum monthly payments, a personal loan may be right for you.

Your expenses are controlled: However, a personal loan will not help you if you cannot control your expenses. In fact, you could get even more into debt. Before you get a personal loan, review your finances to make sure you can afford the loan and pay off your outstanding debt.

If you don't have good credit, you may still qualify for a personal loan, but you could face higher interest rates. If you're facing higher interest rates with a personal loan compared to what you're paying now, skip it or wait until you qualify for lower interest rates. In the meantime, try alternative methods to deal with your debt.