Dealing with Credit Card Debt
The most effective way to tackle credit card debt is by using the debt snowball method. Start by attacking the smallest debt while paying the minimum on everything else. Rinse and repeat. Request your credit card companies to lower your interest rate, as this may help you pay less over time.
Handling Auto and Personal Loans
Auto and personal loans follow the same principle for repayment. Contact the lender and ask them to reduce your interest rate. A great repayment strategy is to call the lending agency and set up bi-weekly payments instead of paying monthly to decrease the total amount of interest you will pay over the loan period.
Paying Off Student Loans
Determine the total amount owed and visit the Federal Student Loan Website to see if your loans can be consolidated, if your interest rate can be lowered, and if you qualify for any loan forgiveness programs. Then, throw every extra dollar you have at the debt, making multiple payments a month if possible.
Accelerating Mortgage Repayment
To pay off your mortgage early, consider splitting your monthly mortgage payment into equal parts paid every two weeks, making extra payments, or refinancing at a lower interest rate. These strategies can help shorten the repayment time drastically.
Establishing an Emergency Fund
Before starting to pay down debt, set up an emergency fund to have a safety net for unexpected expenses. This keeps you on track, prevents new debts, and supports your mental wellbeing during the debt repayment journey.
