Get Out Of Debt Fast With These Useful Tips
Once of the biggest problems that people in our times face is debt. A lot of times it seems impossible to get out of debt. However, according to the founder of Get Rich Slowly, JD Roth, getting out of debt is actually easier than most of us realize. According to him, the best way to get out of debt is to create what he calls a Debt Snowball.
Building a Debt Snowball
Building a debt snowball means putting as much money as you can into repaying your debt as soon as possible. This includes your annual bonuses, any raises that you get – basically any extra money that you get should go into debt repayment. The biggest hurdle most of us face is our unwillingness to pay more than the minimum amount due. This means interest keeps building up and we end up just endlessly paying our debts for a longer period of time.
Steps to Get out of Debt
The theory of building a debt snowball is fantastic. However, to be able to reach that point of paying off our debts, we need to first know exactly how much we need to pay off. Here are a few tips on how you can get the complete picture of how far in debt you are:
Gather Debt Information
- Collect all your most recent load and credit card statements
- Get your free credit report. Ensure you have checked the report for accuracy. Also go through the report to ensure that you have correctly identified all your debts.
- Next, get your free credit score also. This will help you understand whether you are eligible for lowered interest rates on your loans and credit card balances. It will also tell you whether you are eligible for a debt consolidation loan.
Prioritize Your Debt
- Prioritize your debt based on interest rates. The idea is to pay off the loan with the highest interest rates first.
- Once you have prioritized your debts – begin the Debt Snowball. This means paying off as much as possible. So, if you have to pay $100 per month, increase that amount to $110. You would be surprised by how much faster you get out of debt.
This is the most difficult part of the debt repayment strategy. Our credit cards are still right there. So we use them. The best thing you can do for yourself is to remove all temptation. One way to do so is to give all your cards to someone your trust. Or you can keep them in a safe where you can’t reach them easily. Whatever method you choose, you need to remove temptation for yourself.
Negotiate Lower Interest Rates
This blog post actually gives you a word for word script that you can use to negotiate a lower interest rate. You would actually be surprised by how much you can save and how quickly you can get out of debt by getting a lower interest rate on your debt.