Best Way to Consolidate Credit Card Or Any Debt in 7 Steps to Success
Best way to consolidate debt if you’re currently struggling with overwhelming debt, you should know that there are countless things that you can do to resolve it.
Taking a proactive approach to debt management will help you regain your financial freedom and peace of mind. It is important to note, however, that not all debt resolution methods will help you reach your financial goals.
Some are far more beneficial than others. Understanding what your options are and making informed decisions on how you’ll pay off credit card bills is a vital part of regaining your purchasing power and achieving financial stability and health.
Best Way to Consolidate Debt this Year is as follows:
There are 7 best way to consolidate debt for all type of consumers like salaried people, business person, and elderly person. Whether you earn weekly or monthly, you can pay off credit card debt or other bills using these 7 steps. Our US consumer’s due to lack of calculation and lack of financial planning have fallen into debt trap. Remember, accounts and finance is two different things.
We are NOT talking about debt settlement or management. If you use those services to consolidate debt then it is going to affect your credit score. Their main goal is to negotiate a settlement with all your lenders and creditors for a certain monthly fee. At the end, it’s you who need to pay back the loan.
Our aim is to help consumers to pay off debts in a best possible way and improve their credit score and walk away from debts with their head held high.
These are the simple and best way to consolidate debt without having effects such as hyper tension, anxiety, blood pressure, and stress depression. Consumers under debt have lost their ability to think. To become debt free, you don’t need piece of finance, you need financial piece.
Best way to consolidate credit card debt or any debt:
Today, you can burn, smash, or break your credit card because you will get 7 best way to consolidate debt on your own:
Before we begin, List your debt by interest rate:
Don’t ever try to make equal monthly payments to all your debts. It’s a mistake to make equal monthly payments. You will never achieve your goal in paying off debts!!
Pay off high interest debts fast. Keep paying minimum monthly payments towards low interest debts.
Interest Rate in %
When you pay off high interest debts you are going to save large amount of interest rates at the end of the term.
Some of the Best Ways to consolidate Debt now:
Below are the 7 best ways to consolidate debt. You need to change your frame of mind from now on to become debt free.
Average credit card debt in US is around $15,000 and Average APR is 15%. This means you are paying minimum $2,250 which goes towards interest only, not principle. That is like burning your 2250 dollar!!
Let us remind you, getting out of debt is very important. Below pointers remind you how easy and helpful if you practice these steps:
Pay incremental Gain Exponential:
Above you have the list of debt to consolidate with their respective interest rates. Not sure, how many of them know about pay incremental gain exponential. Let us explain, this is one of the best ways to consolidate debt much faster. By doing so, you not only pay off your debts before the loan term but also save lots of money from the total interest rates.
Consider you have decided to pay off high interest debts first. What you will do is, you start making more monthly payments towards your debt in the beginning. See the scenario 1, 2, 3. If you make your minimum monthly payment of $500 for the loan of 40 months term you will end up paying $20,500 including interest. But you will not get any benefits.
See the scenario 2 & 3, you will make twice or thrice of your regular monthly payments. By paying more you will gain more benefits than the scenario 1.
Due to this, Gain you will get is not the same proportional but gain exponential. Whenever it is possible try to make incremental payments towards your debts.
Sell unnecessary items or things for at least 2 to 3 monthly repayments:
Warren Buffet says if you buy things that you don’t need, you will have to sell things that you ‘need’.
Have a look inside your home or business place. There will be certain items or things which is left unused. Simple criteria, if you have not used items or things from past one year, chances are they are useless and for you it has become depreciating asset.
For example: Furniture’s, mobiles, electronic appliances, microwave, heater etc. Even computer or laptop has become old and not using it any more. It takes some time, but you can resell them at craigslist, buy-sell websites for a good amount.
By doing like this, you can use this amount to pay at least 2 to 3 months debt repayments.
Get rid of such depreciating assets and help yourself to pay off debts.
Smart and intelligent people buy appreciation assets. Lesser smart people buy depreciating assets, liabilities, or unnecessary things. Downsize yourself temporarily; you can start evaluating things which can reduce its expenses.
Evaluate some of these:
- Gratification expenses
- Dine out expenses
- Entertain expenses
- Unnecessary monthly subscription services
- Depreciating assets
- Non value adding objects.
You could save some from the expenses, which is useful to make extra payments towards your debts. Naturally, it will help you to reduce your debts along with interest rates.
This will save minimum 5% of your monthly income. For example: If you are earning $2,500 after tax and 5% of these expenses make out to $125 dollar. Use $125 to pay off debt.
Pay off debts with Second Income:
If both husband and wife are working. Then use one’s salary to consolidate debt and dedicate another’s income for living maintenance & savings.
Suppose, only individual person is earning in that case you can plan for extra income. It’s not difficult to find or start looking for additional income. If you have serious goal towards paying off debts then find your passion and make it as your professionalism.
This is, one of the best way to consolidate debt with additional or second income. You can become freelance photographer, content writer, part time tutor, or drive taxi, Marketing executive etc.. There are some jobs where you can spend your weekends working over there.
For women at home, can start catering services, homemade cookies, write blogs, do social media marketing to earn some extra income.
With this additional income, you can earn minimum $500 to $1,000 monthly and use it to pay off debt.
Have an emergency saving Funds:
Another way to consolidate debt is using emergency funds. You can use it, to avoid taking small loans in future. Emergency saving funds as name says it can be useful during your emergencies like medical expenses, car repair etc.
Always make a practice of saving small amount each month, which saves you in a big way. Try to put your savings in liquid debt fund (alternative to savings account) or invest in equity. This can be used whenever you want and also you will get return on investment (interest).
To know how liquid funds works, please read this guide
Habit of budgeting is an extra blessing:
You know about this, but never tried this. Have a data driven approach towards your spending and savings. It’s good to keep your intelligence above emotion. Budgeting means planning your savings and expenses.
“Those who don’t manage their money will always work for those who do it”. As shown below, try to use excel sheet and make a list of your spending in the past 2 to 3 months. By this, you will get an idea about how much you’re spending each month.
You will get both positive and negative results with data driven balance approach. Make a habit of this and start doing your math properly. You will definitely find that extra money which can be used to consolidate debt.
Throw some extra cash on your debt:
If you want to consolidate debt quickly then you can also do it by using extra cash. Throw some extra cash on your debt whenever it’s possible. Do you know, you can use your tax refund loan, bonus, incentives or some sudden windfall gain like winning a bet, selling your vehicle etc?
If there is a ‘will’ then there is a way to do. These above methods not only pay off your debt but also improvise your credit score.
Sometimes, small changes can reap big rewards; these are the best way to consolidate debt.
Make a quick note on how to avoid additional loans:
- Always keep your balances low to avoid any extra interest rates. Pay your bills on or before time.
- Manage your credit cards responsibly.
- Keep checking your credit report history. If you don’t have credit card history then you will find difficult to get an unsecured personal loan.
- Don’t add more debts which is difficult to repay.
- Stop getting additional credit cards just to increase your credit line.
- Try to pay off debts as soon as possible.
What Is the Best Way to Consolidate Card Debt Quickly?
There are few best ways to consolidate credit card debt, it depends on how much you owe.
- The best way to consolidate credit card debt under $3000 is to transfer high interest credit cards to zero percent interest credit cards.
- Another option is to get personal loan or home equity loan to pay off credit cards debt.
- Final option, take loan against life insurance or retirement savings.
Let us make debt free US again; there are lots of individual consumers or business owners who are struggling with their debts. If you know such people, do share this article.
Is it good idea to pay off debt with a Consolidation Loan?
Debt consolidation loan is useful if you have min average or good credit score. Consolidation loan is one loan taken to pay off multiple debts like medical bills, credit cards, high interest personal loans, payday loan etc. By using consolidation loan, you can avoid giving many checks to 4 to 6 creditors every month.
With consolidation loan, you will consolidate all bills into one monthly payment. This will help you to save money on varies high interest rates, penalties due to late or incorrect payments.
- Debt consolidation loan up to $35,000
- APR 6% to 36%
- Min credit score 600
- Term 3 month to 60 months
- There is no prepayment penalties
- No collateral required