What is the best way to pay off debt quickly? Well, there are several ways to accomplish this, but only four are truly doable for most people. If you have the time and the inclination to explore your options, then big savings may be available to you. Here’s how to pay off debt quickly and get on with your life.
Beat the Minimum Payment
It is understood that you must make your minimum payment each month to keep your credit lines in good shape. Miss a payment and your credit will take a wallop.
But if you’re wanting to get out of debt faster, you must concentrate on paying off that debt faster. For instance, if you have a $1,000 credit card debt and are paying just $25 per month, it can take you more than five years to get rid of that debt. On the other hand, if you contribute $100 per month toward that debt, then you can get that debut paid off in just 10 months.
The advantage here is obvious — less debt. It will also allow you to move on to another debt and begin paying that off in bigger chunks too states InstaLoan.
Concentrate on One Debt Primarily
You will continue to meet your monthly payments on all your credit, but there should be one debt that you endeavor to pay down faster. It might be your largest balance, your smallest balance or the line of credit with the highest interest rate. It is your choice here.
Figure out how best to pay down that debt. For example, you might owe $5,000 on a credit card with minimum payments of $50 per month. It would take you more than 15 years to pay off that debt if you stuck to the minimum payment. You really don’t want to know how much of that money goes toward servicing your interest payments.
Determine how much you can reasonably devote to paying off that card. Then, endeavor not to use that card again until after it has been paid off. If you can devote $150 per month in payments, you will have that loan paid off in about four years. That’s more than 10 years of savings.
Consolidate Your Debt
Another way to pay down your debt is to consolidate what you owe. For instance, if you owe $2,400 on one credit card, $3,700 on another card and $3,900 on a third card, then you owe a total of $10,000.
Now you will need to find a credit card that will allow you to transfer all three balances and do so for a small fee. Moreover, the card should not charge you interest for the first six or 12 months. At this point, your minimum payment on the new card will be lower than the three credit card payments were combined. However, plan to pay more than what you paid for each other the cards and you’ll knock off your debt faster. It is a reasonable and easy way to tackle debt when you consolidate your credit.
Commit Your Funds
If you are struggling to pay down credit, consider how you spend the rest of your money. You should know what your other expenditures are and look for ways to reduce your overhead. That reduction will free money for your other accounts.
Savings can be had in several areas, including bundling your Internet service with your phone and cable. You can also save money by combining your car and home insurance to one account. Doing your food shopping at a warehouse club can provide greater savings than what you would find at the supermarket. The list of potential savings can go on and on.