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Reduce Debt In 5 Steps

by erin. (follow)
Blogger/Writer/Aspiring Millionaire Love of interior design, animals and arts and crafts
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Debt. It sucks. Whether itís a massive personal loan of $30,000 or $1,000 on your credit card it all creates the same feelings. Self Doubt, Stress and Frustration.

If you are serious about getting rid of your debt there are some really simple ways to decrease what you pay in interest and get that balance down faster.

1. Compare your financial providers.

If you have a high interest loan or credit card you might as well flush your bank notes down the loo with the kind of money you are wasting. Get online and check out the current interest rates being offered by other companies. If you have some form of security such as a car or caravan you might be able to get a lower interest rate once you have contacted the provider. New Credit card deals are coming out all the time with different incentives to entice you to do balance transfers over to another company. Compare credit card deals and find a deal that has a lower interest rate or interest free period and use that period to pay extra on the debt and reduce the principle balance.

2. Stop buying stuff you canít afford.

It often astounds me when I speak to people who complain about how they are struggling with debt yet they continue to buy new clothes, have meals out or book a family holiday. Stop buying things that you donít need and put your money into the debt people! Once the debt is gone you have guilt free freedom for the luxuries and the vicious debt cycle can stop.

3. Pay Lump Sums And Refinance.

If you are lucky enough to receive a decent tax return, some paid out annual leave or another lump sum payment, use it to slap on your debt. If you do this you significantly reduce what you will pay in interest over the term of the loan as well as being given the option to refinance at a lower rate if the money you put on is enough of a dent in the total.

4. Make Extra Repayments.

Even as little as an extra $10 a week can make a huge impact long term on financed goods whether its a big or small loan. Use an extra repayment calculator on a banking website to see how much you could be saving in time and money on your loans with various extra amounts you can afford

5. Make More Money

Whether you have a look around the home and sell off your old junk in a yard sale or online, get an extra job or turn a hobby into an income, making extra money and putting it into your debt is going to be a great long term plan.

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