Debt Free: Possible?
Is it really possible to get out of debt once and for all? Yes, the answer is absolutely and, you do not have to file for bankruptcy in order to get rid of your financial obligations. So, how can you get to the point of being truly debt free? By following several of the steps outlined as follows.
Pay Off Your Smallest Debt First -- Let's say you have three credit
card debts in the following amounts: $1800, $3335, and $9250. You have been
making minimum payments for the past year plus adding in an extra $20 here or
there. Well, if you keep that up you'll have that debt paid off in 20 years!
While you should always make at least the minimum payments, you should
concentrate on putting the extra funds into paying off the smallest debt first.
When that debt is gone, then you take the monthly amount for the first debt and
apply it to the second one. Soon, the second debt is paid off and you can take
the monthly amounts from the first and second loan and pay off the third loan.
This works like a snowball racing downhill -- you pick up momentum as you are
going. You can shave years off of your debt and save thousands of dollars in
interest cost by following this method.
Renegotiate Your Loan Rates -- That 23% interest rate on credit cards is killing you. Call up your credit card provider and tell them that you want to have your rate lowered. If they refuse, apply for a lower rate card especially if your credit is fair or good. Find a card that will allow you to transfer your rate from a high paying credit card to a lower rate card and save.
Renegotiate Your Loans -- If you are hopelessly in debt and on the verge of bankruptcy, then your credit rating is probably already trashed. So, contact your lenders and ask them to renegotiate your loans, even forgiving some of the balance, if possible. Some lenders would prefer to get at least some money from you then nothing at all.
These are just a few of the ways you can work toward getting freed from debt. Of course, if you take on additional debt in the process then you have defeated yourself and have dug a hole that may be too deep for even you to get out of.