Debt is one of those things in life that is easy to accumulate, but difficult to get rid of. The more debt you find yourself in, the harder it is to dig yourself out. If you have numerous loans, credit cards, and a mortgage dragging you down prepare yourself to buckle down and pay off your debt ASAP with these great tips.
Stop Adding to Your Debt
First and foremost, you will never be debt free if you continue racking up your credit card bill. Credit cards are great in an emergency, but that is all they should be used for. You already have a debt to pay, so stash the credit card away and quit digging a deeper hole to climb out of.
Pay off Smallest Debts, First
If you have numerous loans to pay off, such as a home repair loan, car loan, mortgage and a credit card payment it can be disheartening. You will have moments where you think that none of them will ever be paid off. That is why you want to start with the smallest loan first. The smallest loan will be the easiest to tackle and will leave you feeling victorious. This will help you see that you are headed in the right direction. Then put the amount you were paying for that loan towards the payment of your next smallest loan.
Make More Than Your Minimum Payment
Have you ever noticed the line on your credit card statement showing you how long it will take you to pay it off if you make only the minimum payment? Sometimes, it can take years to pay it off. When making your payments, make sure to pay more than just the minimum payment. By doing so you will end up paying your loan off sooner and save yourself extra interest in the end. Just be sure that your loan is not one that will penalise you for paying it off early.
Fine Tune Your Budget
Take a good look at your budget. Make adjustments where necessary. If you find that you have extra money left over after everything is said and done, don’t pop it into a saving account where you will see no return, and don’t spend it on things you do not need. Instead, put it towards your smallest loan that you have to pay off. That little bit of extra money that you have just “found” by adjusting your budget, is going to get you even closer to paying off your loans.