Often people in debt find it intimidating when looking for a way out. Monthly minimum payments just don’t work. You feel like you’ll never pay off your debts. You find the best course of action is none, so you just stop thinking about it.
This is the wrong course of action.
Although there are no immediate fixes, there are choices. Some of the best ways to pay down debt are fairly simple. Here are a few of the best ways to pay off debt.
Renegotiate Interest Rates
A simple technique to manage your debt is to renegotiate the interest rates on your credit cards. Call the customer-service representative number on your bill. State that you are disappointed with your current interest rate, and would like to find out if there are ways to get it lowered.
If the customer representative says no, ask for a supervisor.
Here are some other tactics for the best ways to reduce debt.
The Snowball Approach
Massive snowballs start with a handful of snow. This is the same way with your debt-reduction plan. The first step is by working on paying off your smallest debt, then continuing until you pay off your largest debt. Begin by making a list of your debts and the amounts you owe, from least amount to largest amount:
$455 store charge card ($45 payment)
$2,000 medical bill ($60 payment)
$5,250 credit card ($140 payment)
$12,000 student loan ($226 payment)
Make minimum payments on all your debts, except the one with the lowest amount — store charge card. For this card, each month pay as large a payment as you can. When you pay off that card, move on to the next and follow the same steps. Pay as much as you can toward the monthly payment of the next lowest debt — medical bills. Continue these steps until you pay off your largest debt — student loan.
Biweekly Mortgage Payments
To follow are some of the best ways to reduce debt for large loans. A good process for huge savings and financial well-being is making biweekly mortgage payments.
With this technique you pay half your regular mortgage payment every other week, instead of the entire payment once a month. By doing this, you’ll pay 13 yearly payments instead of 12.
Your mortgage payment will increase by 1/12th, but the extra payment amount goes toward your principal. You don’t pay interest on parts of the mortgage you pay off early. The amount you save can be substantial.
With a 30-year mortgage for $272,000 at 4.25%, this process can save you more than $34,000 over the life of your mortgage. You could potentially pay off your mortgage five years early! Biweekly payment plans can also work for other types of loans.
Making biweekly payments can take extra time. AutoPayPlus is there to make it easier for you. They can make sure your payments are made on time and ensure they are applied properly for the best debt-reduction advantage. To find out how making biweekly payments is one of the best ways to pay off debt, click here to check us out!
Or call us at: 877-740-0524
Sources:
http://www.thesimpledollar.com/11-ways-to-get-out-of-debt-faster/
http://www.daveramsey.com/blog/how-the-debt-snowball-method-works
