Your debt is one of the biggest hurdles between you and your financial goals, which is why it is important to get rid of it as soon as possible. If you want to make sure that you don’t accumulate more debt over time, you must pay it off at the earliest. Here are some strategies that will help you get rid of all your debt within a year:
- Increase debt repayment percentage
If you want to speed up the process, it is important that you bump up the repayment percentage and use at least 15% of your paycheck for debt repayment. Most credit card companies require you to pay only a small percentage of the outstanding balance each month, which means you keep accumulating debt over time. Putting more money towards your high-interest debts will help you get rid of them much faster.
- Try to get lower interest rates
Call up your creditor and start negotiating for a lower interest rate. If you have a good payment history and a decent account standing, you can easily negotiate much lower interest rates. It will help you save a lot of money that you can use for debt repayment every month speeding up the process even more.
- Don’t borrow any more money
Consolidation loans can be a good idea in some cases but if you want to get rid of your loans quickly, it’s better to steer away from borrowing more money to pay off your debt. Plus, consolidation loans put your property on the line if you miss a payment. Therefore, it is best to not go for a consolidation loan no matter how tempting it might seem.
- Make a debt arrangement plan
One of the best strategies to pay off your debts quickly is to make a debt arrangement plan. There are many benefits of debt arrangement because it helps you arrange and prioritize your debts and gives you the opportunity to look at your debt much more closely.
The idea is to pay the bare minimum for all the debts every month and direct all the surplus money towards debts with the highest interest. This way, you can start paying off all the debts one by one and wipe your slate clean, once and for all.
Missing your bills means hurting your credit score and hurting your credit score means higher interest rates. When you are trying to pay off all your debt within a year, it is absolutely necessary that you never miss your bills to make sure that you don’t have to start paying higher interest rates.
So there you have it, these are some tips that you can follow to start trimming down your debt today. Now, you will have to stay on top of things all the time to ensure that you get rid of your debt within the given time frame. Once you have a robust plan in place, it is all about staying put and allowing things to flow naturally.
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