How to Find the Money to Get Out of Debt

Once you get into debt, it might seem impossible to escape. Interest rates and fees continue to mount and your payments do not seem to make a dent in the amount that you owe. To truly escape the debt trap permanently, it will be necessary to find money to pay off the debts in a lump sum, if possible. If you are genuinely serious about eradicating your debts on your own, you may have to make sacrifices to come up with the funds necessary to do so.

Instructions

1

Liquidate your investments. Although you cannot cash out a 401k to pay off most debts, you can cash out an IRA, stock investments, bonds, CDs and mutual funds.

2

Ask a friend or family member for a loan. Private loans often do not require any interest at all and will be easier to pay off over time than a debt on which interest and fees steadily accrue.

3

Apply for a personal loan through your bank. If you have good credit, you will likely qualify for a fixed-interest personal loan. You can then pay your debts in a lump sum and pay back the personal loan over time, often at a lower interest rate than your current debts are charging you, especially if they are credit card debts.

4

Sell your property. If you have equity in your home or your car is paid off, consider selling your property and purchasing something cheaper. You can then use the difference to pay off some or all of your debts.

5

Restructure your budget to exclude any items that are not a necessity until you can accumulate the money to pay off your debts. You may be surprised at how much you actually spend every month on things you do not need. You may need to sacrifice a little, and it will take some discipline, but it will be worth it.

6

Borrow money from a life insurance policy. Whole-life life insurance policies build up a cash value over time. You may then borrow from that cash value to pay off the debt. Like a personal loan, you will have the opportunity to pay the money back at a much lower interest rate than the debt you are paying off.

7

Seek additional work. You can take on a part-time or weekend job in addition to your current employment and devote the additional income you receive to getting out of debt.