Pay off your debts with these tips!

Thanks to the quick-start crisis that began in 2005, many Finns now have much more debt than they can repay. In the worst cases, debt has accumulated tens of thousands of euros, and sometimes own income is not enough to pay off these debts.

Monthly installments put a lot of stress on your own finances. At their worst, acronyms can be hundreds if not thousands. In such a situation, it is no longer easy to escape on your own, but you have to start thinking about ways to pay off your debts in full.

Some fortunate people have paid off all their debts in addition to all that good, but have been forced into a debt spiral at a later stage. In this article, we’ll tell you how to get rid of your debts and how to avoid being over-indebted.

This will get rid of your debts

This will get rid of your debts

The best way to get out of debt is to do the extra work and save it. However, this is no longer possible in all situations. In such a situation, when no more work can be done and no more savings can be made, it is best to contact the Guarantee Fund, your municipality or your bank.

Loan Guaranteed by the Guarantee Foundation

The Guarantee Fund can guarantee debtor loans up to EUR 34,000 from the bank. Doesn’t matter even if you no longer have credit or have a pending collection. This way you can consolidate all your loans and pay them off in one go. So instead of many small loans, you only pay for one bigger loan. This can be a very convenient solution as monthly installments and interest rates are reduced significantly.

Social credit from the municipality

Some municipalities may grant social credit of up to EUR 5,000-15,000. Again, lost credit history or foreclosure is not a barrier. You can apply for such a loan from the municipality and pay off all your other loans. In practice, this is just a combination of loans.

Consolidation loan from bank

Many banks and online lenders offer consolidation loans. For example, Seth will help you find the right combination loan. This saves you a lot on monthly expenses as well as on very high interest rates.

Arrange with the creditor

It’s also a good idea to contact your creditor directly and try to make a payment agreement. For example, you can request smaller installments, longer payment terms, or grace months. Many creditors are flexible about this and will be happy to help as long as you explain your situation to them. However, it is not always possible to reach an agreement if the payment period is too long.

Debt settlement from the District Court

When all other means have been found to be superfluous, it is time to turn to the district court. Once you have tried all of the above options, you can apply for a debt settlement. In such a situation, you would pay off your debts for a certain amount of time (usually about 2 to 5 years), after which the remaining debts will be forgiven.

This is not a contract favorable to the creditor at all, as the creditor forfeits at least part of his claim. Creditors may therefore oppose this arrangement, but ultimately the court will make the final decision.

Once the debts have been paid

Once the debts have been paid

When debt is finally and finally settled in one way or another, you really do not want to get into the debt spiral again. Everybody in the debt spiral knows exactly how it feels to be in debt spiral and how much stress it puts on their own finances. Once the debts have been paid off, it is time to make plans for the future.

Open a savings account

A savings account should save you money for a bad day. For example, for unexpected expenses such as car maintenance, plumbing repairs or medical expenses. Think about the situations in which you had to borrow for the first time – just for these situations you should save money in a savings account. A savings account will help you prepare for tomorrow. Economic surprises are not surprises at all if you can just pay them off and go on with your life without thinking about them anymore.

Make a budget


If you do not yet have a budget in place, now is the time to plan it very carefully. Creating a budget is not as time consuming as you might imagine, but it really does help to keep your finances in order.

Start by recording all your own earnings first. Record all income from work, subsidies, rental income, and so on. From that income, you should then minus away all your expenses. This is usually the most challenging part for many, as not all of your own expenses are always remembered and a few small expenses may be left out of the budget.

So it’s a good idea to save all your shopping receipts for the previous month and base your budget for the following month on those numbers. When your budget is ready, you will know how good your economy is. Plus, you can make good savings decisions by seeing how much money you really spend on what. Remember to update your budget every month.

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