Heavily in debt? Financial experts would say pay it off! Admittedly, paying it off is easier said than done. But this is something that we should resolve to do if we want to lessen our financial burdens and start living a debt-free life. What to pay off your debts? Here’s how to begin the process of paying it off:
1. Pay more than the minimum amount. A little extra will go a long way. If you keep on paying the minimum, it will take you years to finally pay off your debt, and the saddest reality is that you lose more money because of the interest rates and other fees hidden behind paying the minimum amount. So, add whatever amount you can start with – $20, 50, 100; what matters most is that you start paying more and then add more as your budget allows.
2. Consider prioritizing paying the biggest and most expensive loan first. The bigger your debt is, the bigger the interest and other fees you are paying if you focus on paying off the biggest, the better. You can choose to pay off the smaller debts if you choose to, but bear in mind that the interest rates of the bigger loans will always be the white elephant in the room.
3. Debt consolidation. If you have multiple debts, you can consider applying for debt consolidation. Consolidating your debt is a good move because you will not be confused about the due dates of your different debts, and the biggest benefit is that when you consolidate your debts, you can get a better rate and better terms.
It would be helpful to try your best not to incur another debt that will add to your burden. Steer clear from the temptation of applying for a new credit card when you have already consolidated your debts. Remember that this will be challenging initially, but focus your eyes on the prize – being debt-free!
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