You may be surprised to find that many people have debt. Whether it be debt from a student loan, a credit card of just a standard mortgage, it is actually rarer for someone to have no debt! However, the main goal should always be to get out of debt and you can definitely do that with these money-saving tips. You can join the rare group of people who get to live debt-free in no time!
Pay a Little More When Possible
Most debt comes with a fairly standard payment plan. You likely pay a bill monthly that either stays the same each month or has a set minimum payment. One way to help you get out of debt faster is to pay a little bit more than the minimum. You can do this in several ways. First, assess how much more you have in your checking account that you can part with. Pay that much extra toward your debt. Do this every month and you can watch your debt go down. Another method is to simply round your monthly bill for convenience and to pay more than required. If your bill is $128, pay $150. This is not only an easier number to remember and budget for each month, but by the end of the year, you will have paid more than two whole additional payments! That is a sure way to make your debt go down.
Consolidate Your Debts
If you have multiple debt accounts (say several credit cards, a car loan and, a student loan), you may want to consider combining them all into one, easier to manage payment. You can take out small cash loans in the amount of your total debt. Use the loan to pay all your debts and then, all you will have left is one easy to manage payment. There is a good chance the personal loan will also have a lower interest rate which means you will save-money each month. Easier to manage debt and money saving? It seems like a no brainer!
Look For Lower Interest Rates
If your credit score has improved or you are just in a better financial position now, you can refinance your debt at a lower interest rate. Doing this will save you money each month and help you pay your debt faster. You can also just look for a personal loan that offers a lower rate. Take out a new, lower interest loan and pay your debt off using that cash. Anytime you can secure a lower rate, you should!
Do Not Miss Payments
One of the worst things you can do is to miss a debt payment. Not only will you have to pay a late fee and have your interest potentially go up but it will also affect your credit score. When your credit score drops, it decreases your chances to refinance your debt later on. Set a reminder in your phone, add payment dates to your calendar and sign up for automatic payments if possible. Do everything you can to not throw away money on late debt payments!