Methods of Paying Your Debts Completely
Debt is something common among people today. If you are someone who has a lot of debts to pay, then you must be trying to find ways in order to pay your debts completely. Below are some ways that you can try in order to pay off your debts completely.
Paying all your debts completely is something that you can actually do. In order to succeed in paying your debts completely, you need to have the right attitude and the right approach. You should just do it slowly and soon all your debts will be paid.
You can pay off your debts slowly using the snowball method. This method requires you to list down all your debts according to amount from the smallest to the largest. Start by paying off the smallest balance if you have extra money to pay. When this is paid off, then you will have money to pay for the next debt on your list which is in addition to the minimum payment of your second debt. Every time a debt is paid, you will have more money to pay the next on your list. Make sure that when you have paid off your credit cards, don’t use them unless it is a major emergency.
Another strategy is to use your 401k retirement plan to pay off all your debts so you will no linger have different monthly bills but just your repayments for your 401K loan. 401k loan interest is very much smaller than credit card interests. If you have a 401k retirement plan and you pay your 401k loan, then you payments will all go back to your retirement plan. Even the interest that you are required to pay goes back to our 401k account. You have 5 years to repay your 401k loan. You should also pay it immediately if you leave your job.
You can also talk to your creditors if you are not able to do the above options or any other way of paying off your debts. You should try negotiating with your creditors by telling them your real situation. You can negotiate for lower payments, lower interest rates or a new repayment schedule. If they will not accept your request, then your last option is to file for bankruptcy which you also need to tell them. Most creditors would accept your offer rather than having a total loss.
Another way to pay off your credit card debts is to transfer or pay your debts with another credit card that has a lower interest rate. You should use a credit card which has 0 interest rate for a time. Choose the best credit card with the longest promotional period. If you have this detailed comparison, then you will be able to find the best credit card with your good credit score.
These are just a few of the options that you can use to pay off your debts.