To your financial future,
even one dollar worth of debt can become a heavy weight. Whether the
condescending weight is credit card debt, student loans, or that pesky personal
loan, strategy becomes everything in getting such debt off your back quickly to
free your financial world. This exhaustive guide lays out 12 ways to cut
through and fast-track your debt reduction to regain ebbing financial freedom.
1. Make a Relentless
Assessment of Your Debt
Before suggesting any plan
of action, make a ruthless assessment of your debts. On your report, include
each of your debts regarding:
• Amount outstanding
• Interest rates
• Minimum monthly payments
• Creditor details
A complete overview gives
you a definite view of where you stand concerning the financial landscape and
could help prioritize approaches to repayment.
2. Take on the Debt
Snowball Approach
The debt snowball approach
encourages one psychologically to tackle the smallest debts first. This is how
it works:
• Make a list of your
debts, starting with the smallest.
• Make minimum payments on
all debts.
• Pay anything extra on the
smallest debt.
• Once that debt is paid,
move to the next smallest.
• Momentum and motivation come with each debt that is gone.
The quick wins along the
way build up motivation and momentum.
3. Use the Debt Avalanche
Method
When it comes to paying off
debt, this is all about the most financial advantageous method:
• Pay attention to debts
with highest interest rates
• Continue to make minimum
payments on all debts
• Pay additional cash onto
the highest-interest debt
• Should save you more in
interest
• Pay off more debt quicker
in reality
This strategy will
ultimately minimize the interest paid throughout its lifecycle.
4. Negotiate for Lower
Interest Rates
A lot of people don't know
that they can negotiate with the creditors directly:
• Call your credit card
company
• Ask them to reduce your
rates
• Mention your impeccable
payment record
• Reference competitive offers
from their competitors
• Every percentage point
will save a fortune
A cut of 2 to 3 percent
goes a long way toward debt repayment.
5. Off-Side Job
An extra income source will
help you service your debts:
• Freelancing online
• Driving with ridesharing
• Selling unwanted items
• Pet-sitting or tutoring
• Give 100% of the side
hustle income to debts
Going at an extra $200-$500
would help eliminate debts super rapidly.
6. Slash Expenses like
Crazy
Redirect cash to debts by
slashing expenses mercilessly:
• Cancel subscriptions you
do not need
• Negotiate your bills
• Stop eating out
• Public transport instead
• Pay cash and restrict
your spending
• Sketch a bare-bones
budget
Every dollar saved goes
straight off the debt.
7. Reorganize Your High Interest
Debt
Consolidating a debt can
simplify repayment and lessen interest charges:
• Personal loans with lower
interest rates
• Balance transfer credit
cards
• Home equity lines of
credit
• Combine as many debts as
necessary
• Pay one monthly installment
Before initiating the
process, compare costs and terms with utmost care.
8. Make Good Use of
Windfalls
Any unexpected money should
go to debt servicing:
• Tax returns
• Bonuses from work
• Money from gifts
• Inherited money
• Pay highest-interest debt
first
Don't let the temptation to
spend windfall money elsewhere distract you.
9. Automate Payments
Automatically reduces the
probability of missing payments and increases consistency:
• Set up auto minimum
payment
• Schedule extra payments for
debt
• It protects your credit
score
• Eliminates late payment
charges
• Fuels the steady momentum
of debt reduction
Free automated services for
payment methods are offered by most banks and creditors.
10. Think About Balance
Transfer Cards
Zero/low-interest rate
balance transfer cards facilitate acceleration of the payment process:
• 0% introductory APRs
• Interest-free for about
12-18 months
• Transfer high-interest
balances
• Pay down principal faster
• Little transfer fee
Read the terms carefully
and always have a repayment plan in place.
11. Look for Debt Repayment
Apps
Technology can assist in
the eradication of your debts:
• Expenses tracking apps
like Mint
• Debt payoff calculators
• Automated saving tools
• Visual progress tracking
• Motivational components
Most of these apps offer
free versions with good functionalities.
12. Find Someone to Help
You Go Financially
Professional help can offer
tailored strategies:
• Nonprofit credit
counseling
• Debt management plans
• Complete financial
assessment
• Support for negotiation
• Unique repayment strategy
Many credit counseling
agencies offer a free consultation for the first meeting.
Finish
Paying off debt is possibly
one of the hardest things anyone can achieve, requiring commitment, strategy,
and dedication. Every method above will put you on the fast track toward
financial independence. Remember that the key point is starting-choose the
methods best suited to you and stick with them!
Disclaimer:
Always consult financial professionals for personalized advice tailored to your
specific circumstances
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