A professional credit counselor can help you review your debt situation and identify repayment options and money management techniques that you may not have thought of on your own, McClary says.
And for those with a penchant for spending, having a credit card in their wallet is too much temptation to bear. And if you must, stash those credit cards away in a sock drawer for the time being. But when disaster strikes, you can gain a brand new outlook in a hurry. No matter what that plan is, any one of these strategies can help you get out of debt faster. And the faster you become debt-free, the quicker you can start living the life you truly want. What are some strategies you have used to pay down debt quickly?
Have you ever tried anything on this list? Editorial Note: Compensation does not influence our rankings and recommendations. However, we may earn a commission on sales from the companies featured in this post. To view a list of partners, click here.
Opinions expressed here are the author's alone, and have not been reviewed, approved or otherwise endorsed by our advertisers. Reasonable efforts are made to present accurate info, however all information is presented without warranty. The responses below are not provided or commissioned by the bank advertiser.
Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. Credit and Debt Debt Management.
A consolidation loan or line of credit may help you get out of debt if: it has a lower interest rate than the debts you are consolidating it has a lower monthly payment than all your other debts put together as you can put the extra money toward paying down your debt faster you avoid taking on more debt with the available credit you free up If you're considering a consolidation loan, make sure to ask your financial institution which type of debts you'll be able to pay off. Contact your nearest Citizens Advice to make sure it's the best option for you. Check the timeline for bankruptcy and how to apply. Make sure you understand how you'll be affected before you apply for a debt solution. Find out what questions to ask before you take out a line of credit or a personal loan. Then use any extra money to pay down the debt with the highest interest rate. Editorial Note: Compensation does not influence our rankings and recommendations.
Advertising Disclosure. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website.
All products are presented without warranty. Pay more than the minimum payment. Try the debt snowball method. Pick up a side hustle. Read more : How to Make More Money 4.
Create and live with a bare-bones budget. Then you can do a rough estimate of how long it will take you to get out of debt. Just understand it could take longer than this to repay your debt, but this is a good way to understand roughly how much longer you have to bare this burden. The big goal—the final goal—is to pay off all of your debt. That should be the end point of your timeline. Then, it's up to you what other goals you'd like to set.
Once your goals are in place, they'll be almost impossible to ignore. This will push you toward accomplishing your goals way faster than you would have originally anticipated. There are a few trains of thought when it comes to the actual debt repayment portion.
The first being: Pay balances low to high. This is dumb, because it doesn't take interest rates into consideration.
The second, and more logical: Pay off the debt with the highest interest rate first, then work your way down. Make the minimum payment possible for every account, besides the one that you're trying to eliminate first.
This allows you to focus on it, and to lose the least to interest. While in theory these ideas could work for you, they aren't the best ideas.
Just imagine for a second: Why would anybody want to give you an unsecured loan to consolidate your debt? This concept is known as " snowballing. Now, when you've paid off a debt, you'll have freed up some money that you can now use in conjunction with the minimum payment that was already being made on the next debt down the list.
Then when the next debt is paid off you keep the avalanche going. Do you have a shiny new-ish car or two in the driveway? You can significantly reduce your total debt by trading in your car for something cheap. If you can trade-in two cars and concede to just having one you could double or triple this amount.
You can further apply this to boats, yachts, jet-skis, snowmobiles, Segways, or any other ridiculous self-balancing modes of transportation. Now isn't the time to have toys. You can have toys when you're debt free. Now that ALL of your big ticket items have been either sold or traded in for less expensive versions, you can start becoming a professional Stuff seller. American houses and apartments are filled with crap we don't need. A good way to figure out what you do need: Carry around a notebook and write down every item that you use over the course of a given week.
It's going to be a lot less stuff than you imagine. The rest—the crap that added to the debt problem—has to go.