Best Ways to Pay Off Your Debts Quickly!
A recent survey by the US government revealed a startling figure of 53 trillion dollars as the debt amount being owed by the Americans.
If calculated more precisely, it would come around a hefty sum of $175000 on each American.
This speaks in volumes about the miserable state of the nation's economy.
However, paying off debts is not only limited to economic welfare.
If you clear your personal debts quick, you are sure to experience a healthy state of mind.
For that we have to concentrate on best ways to pay off debts quickly.
Here are some useful tips that will surely help you out: o The best way to get rid of the debt is the faster clearance of the debt having the highest rate of interest.
List down all your loans, credit cards overdue and find the source which sucks maximum amount of interest.
Concentrated efforts should be made to repay the loan causing maximum discomfort.
This method is popularly known as debt snowball.
Here the effort should be made to clear the loan not with the least amount but with highest rate of interest.
Another trick which can be used for faster debt clearance is transfer of loan to a low interest credit/debit card from a high interest card Lots of websites now provide you with online snowball calculators which will help you in deciding which debt to pay first o The second important point to be kept in mind is that in case of surplus try paying extra amount towards your debt clearance instead of the usually EMI's.
If need be cut on those extra expenditures like eating out, going out for movies and save money so that you can save precious extra hundreds and thousands of dollars which would otherwise had been spent paying the interest.
o Another option which can help you clear the debt debris, would be taking money from your savings account.
The interest generated from savings account is usually way below the interest amount which you end up paying as a borrower.
Therefore it will be a wise decision to use your savings efficiently for loan payments before stocking on your retirement savings o A friend in need is a friend indeed.
Who can help you better, in times of crisis other than your friends and families? It is better to take a virtual interest free loan from your loved ones to repay the high interest debts.
To avoid future family feuds it is always better to get a written agreement in place with proper terms and payment conditions.
This will also help in preserving mutual trust and faith o If you are a regular contributor to the retirement fund at work, under section 401(K) then you are eligible to borrow up to $50000 from your retirement savings.
However, you have to repay this amount within a span of five years and if you plan to change places during these five years you will have to refund the balance amount to your employer.
o If you have tapped all your resources, emptied your savings account and still unable to pay off the huge debt but you have your own home you can consider taking a home equity loan.
Taking home equity loans helps in killing two birds with a single stone.
Firstly you get a cash at 6-7% rate of interest to close loans with higher rates of interest and secondly it also helps you in tax savings So select one of the above options based on your needs and find the best way to pay off debt quickly.
If calculated more precisely, it would come around a hefty sum of $175000 on each American.
This speaks in volumes about the miserable state of the nation's economy.
However, paying off debts is not only limited to economic welfare.
If you clear your personal debts quick, you are sure to experience a healthy state of mind.
For that we have to concentrate on best ways to pay off debts quickly.
Here are some useful tips that will surely help you out: o The best way to get rid of the debt is the faster clearance of the debt having the highest rate of interest.
List down all your loans, credit cards overdue and find the source which sucks maximum amount of interest.
Concentrated efforts should be made to repay the loan causing maximum discomfort.
This method is popularly known as debt snowball.
Here the effort should be made to clear the loan not with the least amount but with highest rate of interest.
Another trick which can be used for faster debt clearance is transfer of loan to a low interest credit/debit card from a high interest card Lots of websites now provide you with online snowball calculators which will help you in deciding which debt to pay first o The second important point to be kept in mind is that in case of surplus try paying extra amount towards your debt clearance instead of the usually EMI's.
If need be cut on those extra expenditures like eating out, going out for movies and save money so that you can save precious extra hundreds and thousands of dollars which would otherwise had been spent paying the interest.
o Another option which can help you clear the debt debris, would be taking money from your savings account.
The interest generated from savings account is usually way below the interest amount which you end up paying as a borrower.
Therefore it will be a wise decision to use your savings efficiently for loan payments before stocking on your retirement savings o A friend in need is a friend indeed.
Who can help you better, in times of crisis other than your friends and families? It is better to take a virtual interest free loan from your loved ones to repay the high interest debts.
To avoid future family feuds it is always better to get a written agreement in place with proper terms and payment conditions.
This will also help in preserving mutual trust and faith o If you are a regular contributor to the retirement fund at work, under section 401(K) then you are eligible to borrow up to $50000 from your retirement savings.
However, you have to repay this amount within a span of five years and if you plan to change places during these five years you will have to refund the balance amount to your employer.
o If you have tapped all your resources, emptied your savings account and still unable to pay off the huge debt but you have your own home you can consider taking a home equity loan.
Taking home equity loans helps in killing two birds with a single stone.
Firstly you get a cash at 6-7% rate of interest to close loans with higher rates of interest and secondly it also helps you in tax savings So select one of the above options based on your needs and find the best way to pay off debt quickly.
Source...