More than half of Americans are in debt over $5000, and as many as one out of five are in unmanageable debt. This happens as a result of people taking out loans that aren’t realistic for their budgets. Getting in over your head in debt often leads to more and more debt until you’re potentially facing bankruptcy.
Before you allow your debt to swallow you whole, it’s ideal to pay it off sooner than later. Here are some of the best tips for paying off your debt faster.
Pay More Than The Minimum
Even though you’re offered to pay only the minimum payment when you pay off your credit cards, it’s not the best way to pay them off. You should pay more than the minimum in order to get rid of the debt faster.
It can take you over a decade to pay a debt of $10,000 by paying only the minimum amount due, depending on your APR rate. Not only will you be in debt longer, but you’ll be paying interest on top! Over time you will have paid back significantly more than the amount you borrowed initially. The best way to speed up the pay off process is to pay as you can as soon as you can.
Give The Snowball Method A Try
One of the best-proven methods for paying off your debts is known as the snowball method. The idea is that you start paying your debts off from smallest to biggest. By seeing the smaller debts disappear one by one, you’ll feel more motivated to keep going.
You take the interest that you were paying to the smaller debts and instead put them towards the next bigger debt, in effect, creating a snowball method. Eventually, you’ll be debt-free and no longer a slave to your credit cards and loans.
Get a Part-Time Job
If you don’t have as much money as it takes to pay off your debts with your current salary, then get a part-time job. Do whatever it takes to generate as much as it takes to pay off the debt. It may not be convenient having two jobs, for the time being; however, when you’ve paid everything off, you’ll feel free. Your money will no longer be taken from you only to go straight to the banks anymore. You can use your money for things that will go towards your future!
Sell What You Don’t Need
If you’re truly ready to get out of debt, then you should be prepared to do whatever it takes to get out of its grips. Consider selling anything that you don’t need and putting the money directly into paying off your loan!
For example, if you’re nearing retirement or facing a life-changing illness, you could sell your life insurance policy for a cash payout.