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5 Tips to Get Out of Debt Faster

Posted September 28, 2012 by Elizabeth Goldman to Debt 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

For many people, getting out of debt sounds like a dream come true, but a far stretch from what is possible. This article will provide tips on how to get out of debt faster, including consolidating your debt to help make it more manageable.

Know What You Owe

The first thing you need to do is to know the amount of you total debts. There is no way you can have a plan of clearing your debts if you have no idea on how big it is. Make a list of all the debts you owe and when they are due. Do not forget to factor in interest, which easily inflate even small debts. Include all the details you have about the debts, including what you can do to minimize their respective interest. Of course, you also have to avoid more borrowing since that would only lead to an endless circle of borrowing.

Try Debt Consolidation

Paying off different creditors is very expensive, mainly because of the different charges involved. That is why you need to consolidate your debts to a single manageable one. Secure the services of a debt consolidation company and present them with the debts you wish to pay off immediately. In most cases, you will enjoy a lower interest rate or a fixed interest rate. Debt consolidation works very well for credit cards, and you can use it to avoid all the late fee charges. Besides, it is very bothersome to keep track of different debts and effect all the repayments in time, and you obviously don't wish to be bothered by debt collectors.

Do Not Choose the Easy Way

In case you have decided that debt consolidation will not work for you, think about paying more than your lowest monthly payment amounts. It is easy to be tempted to pay only the absolute minimum, but that will mean that you take the longest time possible to pay clear the debts. Since you wish to clear them faster, take a look at your budget and see if there are expenses you can cut off. For example, if you can drive the same car to work with your spouse, do so to save on the fuel bills. Then you can use the money saved to pay off your debts sooner.

Deal with Your Most Expensive Debt First

If you have decided to pay off your debts one by one, you should start with the one that is costing you the most. Of course, you might not have the luxury of stopping payments on other debts/credit cards, but you can get away with paying only the absolute minimum. That way, you can use the rest of the money to settle your heaviest load. When you are done with the most expensive debt in your list, you then move to the second one and so on until you clear all of them.

Seek Professional Financial Advice

If you are into serious debt, or if you feel you cannot handle the repayments on your own, you should seek the help of a financial adviser. Be careful here, however, because some financiers charge very exorbitant fees. While it may be possible to find free financial advice, there are also good advisers who charge reasonable fees. Explain all the details to the financial expert without hiding anything and let him help you clear the debts fast. It is best to stay clear off debts in the first place, but if you have been caught up in this bad cyclic habit you can follow the above tips to stop it.

About Elizabeth Goldman: Elizabeth Goldman is a freelance finance writer who enjoys sharing her tips and insights on various finance blogs and has contributed this piece on behalf of DebtConsolidationLoans.uk.com.

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