A majority of Americans are in huge debt. According to a 2017 report released by Experian, the average American has around $6,354 in credit card debts and about $24,700 in other loans such as car loans. Here are tried-and-true ways on how to get your debts paid off faster.
Pay Slightly More Than The Minimum
In most cases, it takes several years to fully repay your credit card debt. Furthermore, it’s not easy to prevent yourself from adding more debt to the balance. In order to get your loans repaid faster, you need to consider paying slightly more than what you pay each month.
In fact, this approach will help you save some quick bucks on the loan’s interest. It’s also advisable to ensure the loan doesn’t charge prepayment penalties before you commit yourself. Tally and ReadyForZero are great online tools to consider for this strategy.
Apply The Debt Snowball Approach
If you feel paying more than your minimum is not ideal for you, consider applying the debt snowball method. With the snowball approach, you will build momentum and repay your debt much faster.
You should start by putting all excess funds on the smallest balance while paying minimum amounts for larger debts. Once the smallest debts are fully paid off, you should move on to the next loan on your list until you complete paying off all debts.
Gradually, you’ll realize that your small balances will start disappearing one by one giving you more money to pay off the larger loans. The snowballing method gives you the motivation to focus on paying off larger loans in the near future.
Launch A Side Hustle
Earning some extra cash to supplement your monthly income will amplify the debt repayment process. If there’s a skill that you can monetize offline or online, consider doing your research and launching a side hustle.
You can clean houses, mow yards and become a virtual assistant. Upwork, Indeed, Craigslist and TaskRabbit are some of the great online platforms where you can find well-paying gigs.
Cut Your Expenses
Consider being a frugal spender. Find creative ways on how to cut your expenses and live on a limited budget. In other words, limit your expenses as much as possible and live on as little as possible during the debt repayment period.
Your limited budget should be devoid of any unnecessary spending such as going out to eat. While you cut your expenses, you should make sure the savings go toward paying off your debts. Once you’ve finished repaying your debts, you can consider adding some discretionary spending into your budget.
Negotiate Your Interest Rates
Sometimes if your credit card interest rates are too high, it might be difficult to make significant headway. Contact your card insurer and try to negotiate these rates.
Thankfully, many established card insurers are willing to listen to their clients and do everything to lessen the debt burden. In addition, there are several other bills that you should consider negotiating down or eliminating entirely.
In a recent Pew Research study, it was revealed that 50 percent of Americans spend more than their monthly earnings. That’s why millions of people are silently struggling with debt. Therefore, it’s better to face the debt challenge head-on before it escalates and becomes unmanageable.