Outstanding Debt Help

It can take a lot of planning and effort to pay off high outstanding debt. Debt is common if financing a home or automobile. However, high balances on a credit card or unnecessary installment loans can increase your debt load and lower your credit rating. Fortunately, help is available to help eradicate high balances.

Debt Calculator

Using a debt calculator to calculate how many months it will take to pay off outstanding balances helps with debt elimination. To begin, calculate your total debt by adding up the balances of each statement. Next, determine how much you have in disposable income each month by reviewing your personal budget. Based on disposable income, divide this figure by the calculated total of your debt. This provides information on how many months it will take to pay off your outstanding balances.

Creating Extra Income

Disposable income can become an issue if you don't earn a lot of money, and lack of income can significantly slow down any efforts to pay off credit card balances. Consider ways to possibly increase your monthly income, even if it's only temporary, to provide extra cash to pay off debt. Possible solutions include asking your employer for additional hours or taking part-time work and using all extra income to pay off balances.

Benefits of Increasing Monthly Payments

Gradual increases in monthly payments to creditors and lenders can shave months or years off outstanding balances. Credit card companies often request small monthly minimums. Although convenient and affordable, small monthly payments toward huge outstanding balances prolong debt and lead to higher interest payments during the life of the debt. Break the routine of paying only the minimum and always submit larger payments.

Effects of High Interest Rates

Getting a low-rate or zero percent interest on a credit card can quickly help drop your balances. With no interest payments or charges each month, all of your monthly payments goes to reducing the outstanding principal balance. There are several methods of acquiring a better interest rate, such as applying for a low-rate balance transfer credit card. Bankrate.com recommends calling up your present credit card companies and asking for a lower rate. An excellent credit history with no late payments helps you negotiate an interest rate reduction.