What to Do When Facing High Credit Load

One microloan on top of another, and the situation is getting worse every day? Even if you are not spending any more, you may already be struggling with monthly payments. Let’s explore what can be done in such a situation.

It is crucial to objectively assess your financial capacity even before taking loans. There are no magical solutions to reduce credit load, only universal recommendations that can help find optimal approaches. These must also be evaluated based on your individual situation.

Refinancing Options

Unfortunately, refinancing microloans through a bank is almost impossible. Banks rarely agree to this. In theory, to eliminate expensive microloans and pay a single credit, you could try taking a consumer loan to cover them, but with a high credit load, getting approval is extremely difficult. Another possibility is a secured loan, but it is essential to calculate everything carefully to avoid losing the pledged property.

Increase Your Income

The next option is to find additional income to repay debts. This could include part-time work, one-time services, freelancing if you have valuable skills, or even selling or renting unused items. Every extra ruble should go towards paying accumulated debts, which may require stricter budgeting and cost-cutting.

Borrowing from Family or Friends

Another option is to borrow from relatives or close friends, but you need to be aware of who in your circle can help. It is crucial not to lose their trust and to ensure repayment.

Credit Holidays and Restructuring

If you have lost your job or your income has sharply decreased, you can contact lenders to request credit holidays. This provides a temporary break and allows time to save money. You can also request restructuring of debt with a revised payment schedule. However, the decision rests with the creditor and depends largely on your situation and persuasiveness.

Strategic Repayment

If creditors do not grant concessions, you should build a debt repayment strategy. At a minimum, avoid long-term delinquencies (over 90 days), when creditors can start legal collection procedures. One approach is to focus first on repaying the most expensive loans or those taken earliest.

Gradually closing one loan after another can have a positive psychological effect due to the sense that the number of debts is decreasing, which increases motivation to continue repayment. Additionally, planning a realistic repayment schedule can reduce stress and help maintain better financial discipline.

Bankruptcy as a Last Resort

If you have accumulated large debts and have no means to repay them, consider bankruptcy. This is a legal way to get rid of hopeless debts. Keep in mind that if you have assets, creditors’ claims will first be satisfied from them. The same will happen if you stop paying voluntarily. Bankruptcy procedures also allow you to preserve a subsistence minimum to maintain basic living expenses.

Additional Advice

It is also helpful to keep track of all debts and create a clear list with amounts, interest rates, and deadlines. Consolidating this information can reduce anxiety and allow better prioritization. Setting up automatic reminders for payments and monitoring your spending can further improve your ability to manage a high credit load effectively.