Being in debt is one of the most stressful experiences that you can ever go through. No matter what your situation is, if you owe someone, you are supposed to repay it back even if you have gone through a life-changing experience such as losing your job or even getting into an accident. However, you should not worry because you are not alone. An expert from a reputable student loan consolidation organization says that most students are involved in multiple loans. Therefore, if you are looking for the best ways to clear your debts, follow the following advice and you will be assured of smiling sooner rather than later.
The Best Ways To Clear Your Debts
Create a budget
The “b” word is the most important way of clearing your debt. In truth, a good budget isn’t just your spending document, but also your income plan. It can help you remain on a straight path and even broaden your current debt payments or even accelerate your payments.An income and spending plan is something that you should lay out to ensure that you are earning more than you are spending. The difference should be used to repay your debts.
Organize your debt
This is vital to creating a plan for paying off your debt. One approach is to list all your debts from the smallest to the largest. Start to commit more money to the smallest debt while making just the minimum payment to the other debts. This method doesn’t consider the interest rates. However, it is very effective as it helps you to build the momentum. Another way is to list all your debts from the highest interest to the lowest interest. This method is known as laddering method. This approach makes the most mathematical logic, as you will save a lot of money in interest over time.
Pay more, not just the minimum balance
Paying more than just the minimum balance is one of the best ways to clear your debts because you make a huge dent in your debt. In fact, paying the minimum often 2 to 4% of your outstaying balance only prolongs your debt payoff plan.Strengthen your payment plan by making daily or weekly payments, instead of monthly payments. You can even decide to double your minimum payments. For example, pay $400 ($100 every week) instead of $200 (monthly).
Sell unwanted household items and gifts
Do you have any old wedding gifts or birthday presents collecting dust and occupying space in your closet? Go through your properties and identify items that you can sell on eBay or Amazon to raise cash for paying your debts.