Whether it’s credit card debt, a personal loan, a car, or a student loan – No matter what type of debt you have, by following the simple strategies listed below, you could pay off your debt quicker and start living the life you really want.
1. Make extra payments
One of the most effective ways to get rid of debt faster is to repay more than the minimum payment on your personal loan, mortgage, or credit card debt. This activity speeds up your payoff process and saves you interest. Before doing that discuss with your lender or bank to avoid any early repayment charges.
2. Repay small loans first
List all your debts from smallest to largest. Make minimum payments on all the loans. With the excess amount repay the smallest loan first. Once the smallest loan is paid off, start repaying the next smallest loan and so on. The goal is to pay off all loans and be debt free. By doing this it will be easier to keep track of your larger loans whilst your smaller loans will be paid off quickly.
3. Pick up a second job
Take a second job to pay off your loans quicker and become debt-free as soon as you can. Almost everyone has a skill that they can monetize. If you are able and willing, you could take a suitable weekend, seasonal or holiday job and earn extra cash to pay off your debt faster.
4. Sell things you don’t need
If you have things that are lying around, rarely used, and won’t be used in the next two or more years, why not sell them? You can either sell with an old-fashioned garage sale or unload your unwanted things online and get some extra cash that can go towards paying your debts off.
If it appears impossible to make any headway on your loan balances because of the high interest rates, it’s worth trying to negotiate with the lender. It’s quite common and if you have a history of making timely payments there’s a good chance that your request could be considered. You can negotiate or eliminate other bills like cable, internet services, mobile phone bills or even car insurance. Try it, the worst anyone can say is no, however if someone agrees, then you can save extra money that can be used to pay off your debts.
6. Use found money wisely
If you find some forgotten cash in a warm coat that you left in there last season, an inheritance, tax refund, annual raise or a bonus at work – you could use these extra dollars to pay off a big chunk of your debt.
7. Step away from expensive habits
If you spend a large amount of your money on alcohol or tobacco and it stands between you and your debt-free life – Quit it. Driving by a favourite restaurant or shopping mall can raise your temptation to splurge. Hence, if you are already in debt and regularly fall short each month, you should step away from expensive habits until you become debt-free.
Have you tried anything on this list? Feel free to share the strategies that helped you get out of debt with our readers.