If you have a lot of consumer debt, you may wonder how can I get rid of my debt?

It’s a common question and one that causes most people stress. They wonder if and how they’ll ever feel financially free from the strain of carrying too much debt.

Fortunately, there are many great ways to reduce and eliminate your debt.

Get Help from a Credit Counsellor

If you can’t figure out how to get out of debt and you’re on the verge of being unable to make even the minimum payments, get in touch with a credit counsellor. Whether you need a debt consolidation plan, a consumer proposal, or it’s time to file bankruptcy, you can get the professional support you need to get your finances in order.

There’s no shame in getting support and knowing what options there are for you. Consider yourself strong for recognizing you need help and smart for getting yourself back on track.

Pay your Debts in Balance Order from Smallest to Largest

If you thrive on ‘small wins’ pay your debts off in order of balance. Don’t look at any other factors like the interest rate, but instead, focus on the balance.

Make the minimum payment required to every debt you have, but any extra money you have, focus on the debt with the smallest balance. Do this each month until you pay your first debt off in full.

You’ll see a quick win – you’ve paid off a debt! Now take the money (minimum payment plus extra money) and put it toward the next debt in line. Keep the process going until you’ve paid off all your debts.

Pay your Debts in Order of Interest Rate

If paying interest bugs you, order your debts in interest rate order from highest to lowest APR. It will take longer to see the progress since you’re paying the debt with the highest interest rate first, but you’ll save the most money.

Like the method above, you’ll make the minimum payment to each debt and then pay any extra money you have toward the debt with the highest interest rate. As you pay the balance down, you’ll pay less interest and be able to pay your debts off faster.

Once you pay off the first debt, take the minimum payment plus any extra money you paid to the first debt and do the same thing with the next debts in line until you’re debt-free.

Cut Back on Expenses

You probably have more money than you think to pay off debts, but you spend it on needless items. If you want to find extra money to help pay off your debts faster, look at your spending for the last 3 to 6 months.

Pull your bank and credit card statements for this time and categorize your spending. You might be surprised at how much you spend and where you spend it. Figure out where you can cut back and dedicate any money you save toward your debt payoff.

Consolidate your Debt

If you have a lot of debt with high-interest rates, consider consolidating them into one loan or credit card with a lower interest rate.

If you have great credit, you may qualify for a balance transfer credit card with a 0% APR. If you pay the debt off before the rate expires, you’ll pay no interest, making it easier to get out of debt.

Even if you can’t get a 0% APR credit card, any loan with a lower APR than what you pay now will help you get out of debt faster because you’ll be able to pay more toward the principal rather than the interest.

Ask your Creditors to Lower the Interest Rate

If you’ve paid your bills on time, but just wish you had a way to get out of debt faster, ask your creditors to lower your interest rate. You might be surprised to learn that they will often approve your request if you have a timely payment history.

With a lower interest rate, you can pay more money toward the principal, paying the debt off faster.

Work out a Repayment Plan

If you’re over your head in debt, you may want to ask for a debt repayment plan from your creditor. Most creditors would rather work out a payment plan with you rather than have you default on your loan.

It’s always best to contact your creditors first and ask them what plans are available to you. Each creditor offers different levels of support and you won’t know what they’ll offer you until you ask.

Pay more than the Minimum Payment

Credit card companies make it so easy to make just the minimum payment. You see what’s required of you and you pay it, not thinking about the consequences of carrying the debt from month to month.

While it seems more affordable to pay only the minimum payment, it’s actually more expensive in the long run. You’ll incur more interest charges by carrying a balance.

Instead, pay the full balance if you can and if you can’t, make payments as large as you can. The more principal you pay down, the less interest you’ll pay and the easier it will be to get out of debt.

Final Thoughts

Reducing your debt isn’t impossible, even when it feels overwhelming. You have many choices that can help you make the most out of your finances. If you need support, contact the experts at EmpireOne Credit. Our professionals will discuss each option that is available to you that fits your budget, getting you out of debt and giving you the financial freedom you deserve. Debt Free …. Feels Good!