Drowning in debt can hinder your sleep and create anxiety, which can trigger physical symptoms such as stomach pains, depression and tension headaches. Rather than let debt control you, learn to handle your debts and pay off balances faster.
Budgets
Spending money on extras each month takes a chunk of your money and leaves little left over for debt payments. Create a budget at the beginning of each month. Write out your monthly required expenses, including minimum debt payments, and exclude unnecessary expenses such as entertainment, dining out and shopping. Allot a certain amount of money each month to grocery shopping, transportation, housing and utilities. Stay within the budget. Use whatever you have in disposable income to pay down high debts before you spend any of that money on other items. Let's say you owe $10,000 in credit card debt. You could pay it off in two years with $400 monthly payments.
Interest Rates
The interest rate on your credit card plays a role in debt elimination. It doesn't hurt to contact your creditors and negotiate a lower rate on your credit cards. This works to your advantage in two ways. First, lower interest rates reduce interest charges and minimum payments. Second, paying less interest means that your creditor will apply more of your payments to the principal balance. Often simply asking for a better rate results in one.
Debt Settlement
Creditors vary, however; some are eager to work with debtors to reach a debt settlement. If high debts prevent you from making monthly payments, rather than lose money completely, your creditor may forgive a percentage of your debt and accept a smaller payoff. Call your creditor to negotiate a settlement. Get everything in writing once you've reached an agreement with your creditor.
Debt Counselors
Overwhelming debt can be too much for you to handle alone. A debt counseling agencies will assist you in getting out of debt faster. Counselors provide numerous services, such as speaking with your creditors for you and working out a new repayment plan, which often involves lower interest rates and minimum payments. Nonprofit debt counseling agencies do not charge a monthly fee.
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