6 Effective Methods In Reducing Your Debt

Published on 25 June 2014

Debt is like a quicksand, the more you struggle, the more you sink. Four out ten people use their credit cards to pay for groceries, while the ten percent uses their credit to pay domestic bills while others are driven to debt to cover the mortgage. Having debt seems to be a part of our daily living. For those who are already struggling with debts and to those who know that their debt will pile up soon here are the 6 effective methods in reducing your debt.

 

  1. List down all your debts.

It is important that you know how much exactly you owe. You may think you already know how much you owe but you don’t actually realize the extent until you list it and put it in black and white. If you are looking for ways to reduce debt, you need to know first how much is your debt.

 

  1. Pay at least the minimum of all your debts.

 

If you have multiple debts, make sure to pay the minimum of each of them. By doing this, you are protecting your credit rating. If have extra to pay for more, pay it to the debt with the highest interest rate. It could a while to pay all your debts, but you are slowly and surely you are chipping away the mountainous debt until it all be gone.

 

  1. Ask for a lower interest rate.

 

Ask you creditor for a lower interest rate. If you have a good record, most of the credit companies are lenient in giving lower rates. However, if the company refuse to give you lower interest rate despite of your good record find another company that offers lower interest rate. There are even credit companies that offers zero interest deal.

 

  1. Consolidate all your debts.

 

It is a good idea to consolidate all your debts into one low interest loan. The most common options for debt consolidation are the line the home-equity loan and the line of credit. Interest rates for these loans are reasonably lower, but you have to conscientiously pay the loan or else you might lose your home.

You may use online debt calculator to find out long you could pay your debt.

 

  1. Change your lifestyle.

 

One of the common reasons why people are buried in debts is because of uncontrolled lifestyle. Cut back on things that you don’t actually need. Reduce the wants and luxuries. Trimming your budget down to what is necessary will free up more money to pay your debts.

 

  1. Consult professional.

Professional debt negotiatorshttps://www.creditmediation.com.au/ and financial planners can help you on how to reduce your debt the fastest possible way. They are expert in devising debt reduction plan that can help you paying all your debts.