Everybody wants to get rid of debt and lead a stress free life. However, there is no short cut way to get out of the vicious cycle of debt. It'll take a long time, patience and dedication for you to become free from all your financial obligations.
Ways to pay off your debts faster
Following are some of the basic steps that will help you to repay your debt faster and improve your credit score both at the same time:
1. Make extra monthly payments: If you can afford, then try to pay more than the minimum loan repayment amount. This is because your lenders will charge more interest on your loans, if you take too much time to repay the outstanding balances. That's why, don't fall for their selfish game and pay back your dues as early as possible.
2. Have a clear understanding about your cash flow: It won't be possible for you to save or invest your money, if you don't have any track of your total funds. You should keep a record of your total money that come in or goes out from your wallet after meeting all living expenses. After calculating the cash inflow and outflow, you can easily realize your present financial status that means surplus or deficit. If you are living in a surplus state, then it will permit you to save more money and pay back your all dues. On the contrary, if you are in a deficit, then you should spend your money carefully and try to reduce credit card uses.
3. Systematize your payments: Make all your utility bill payments via direct debit. This method is easier to handle than sending checks on a regular basis. It'll also help you to save more money as the majority utility service providers will give you discount offers for making direct debit payments. You can easily make automated payments by informing your bank with all the information about your utility suppliers.
4. Opt for a cheaper bank card: Get in touch with different creditors and try to find out the credit card with a lower rate than you're paying now. Then take initiative to transfer your balance from existing credit card to lower rate credit card which in turn will help you to get out of debt trap faster. Keep in mind that this low rate offer will become significantly high after the completion of offer (interest-free) period. In this situation it would be better for you to switch over from your lower rate credit card account again for the next 6 months and repeat this process.
5. Pay off your highest rate debts first: At first concentrate on your most expensive debt and try to make extra payments to pay that one off as early as possible. Make minimum payments on all of your low rate debts. Once you're able to pay off your most costly debt, then take care of the next most expensive debt. Repeat this process until you clear your all dues. This tactic will help you to get relief from all your debts quickly.
At last, if you want to get relief from your debt burden, then you should cut down your spending. People always think that money is earned to enjoy life. But it,s not true. People should set aside some money for their secure future and unforeseen circumstances. If you are overwhelmed with debt and relentlessly thinking about it, in reality you may get into severe depression. That's why you should give up your some luxurious habits to make yourself free from debt burden.