How to Pay Down Debt When Money Is Low

Paying down debt may come easy for people who have extra money. They can simply write a check to pay off their credit card balances. But if funds are low, getting rid of credit cards and other types of debt can prove challenging. Fortunately, you don't need a lot of extra money to eliminate debt. True, having money can speed this process. But even if you're not in a position to wipe away debt with a single check, other options are available.

Instructions

1

Renegotiate your interest rate on credit cards. Take an active approach and call your credit card company. Ask for a lower interest rate, and if necessary, ask to speak with a supervisor. With a lower interest rate, more of your payment goes toward knocking down the principal.

2

Double your minimum payments. If the minimum payment on your credit card is $25, send $50 or $75 a month. Paying an extra $25 to $50 may not create a huge financial burden, and it helps you pay down the balance quicker.

3

Use the money you would otherwise spend on extras such as hair appointments, dining out, shopping and cable to pay down debt. Getting rid of debt often calls for personal sacrifice.

4

Borrow from family. Obtain an interest-free or low-interest loan (with a repayment plan) from a family member. Use this money to pay off your high-interest balances.

5

Borrow against your home's equity. Home equity loans carry low interest rates and fixed terms, which are more attractive than high-interest, revolving credit cards. Discuss home equity options with a mortgage lender.

6

Get rid of personal belongings. Selling material possessions can create enough funds to pay down debts when your money is low. Opt for a lower car payments and trade in your current vehicle, if applicable. Spend a day going through your home (garage, attic, basement and closets) and pull out items you no longer use. Have a yard sale or sell these items online or via classified ads to generate cash to get rid of debt.