You can wish you didn’t have debt but that won’t make it go away. You could play the lottery and hope to hit the jackpot, but odds are you’ll strike out there too. Everyone has debt, everyone wants to pay it off, but not everyone has a plan to get rid of their debts. That said, here are the only tried and true methods to paying off your debt.
Make Extra Payments
If you make the minimum payment on your credit card debt it is going to take you ages to pay it off. The only way to truly slash your credit card debt is to make extra payments. You are allowed to make more than one payment per month. In fact, you may even make a payment every week. If you get a bonus at work, make an extra credit card payment.
The same applies to other types of debt. If you want to pay off your 30 year mortgage in less than 30 years you’re going to need to make additional payments to the principal. You can apply this same concept to your auto loan if you want to turn that 5 year loan into a 3 year loan.
Renegotiate Your Debt
Let’s say you purchased furniture that cost you $5,000 several years ago. You got a loan for them and were supposed to make monthly payments. For some reason or another you couldn’t meet your obligation and the debt went into collections. You still owe the money. It still shows up on your credit report. Now you’re getting nagging calls and countless letters.
How do you pay off this debt faster? You renegotiate your debt. What you do is contact whomever you owe and make them an offer. Let’s say you owe $3,500 and haven’t made a single payment in one year. You can offer to make a one-time $2,000 payment to wipe the debt from your credit report. If they accept, you just saved yourself a big chunk of money.
Don’t Get More Debt
If you’re trying to get rid of the debt you have, it’s important not to accrue more debt. In order to not add up more to your debt you will need to create a budget and stick to it. Then you’re going to need to add money into your savings account. If an emergency comes up you can just use the money in your emergency account rather than using your credit card.