Debt Elimination Plan: The 4 Step Debt Plan

Debt Elimination Plan

For most, trying to get out of debt is one of the toughest financial endeavors you will find yourself in during your lifetime. I have provide you a four step debt elimination plan that will help you get out of debt in a very short period of time. Because the key to eliminating debt is having a strategy and perseverance.

Step 1: The best comprehensive thing you need to do before shedding your debt, is to stop yourself from adding more debt. This could include cutting up those debit cards, stopping yourself from going to your favorite stores each weekend, or delay purchasing that dream car you have always hankered after.

The more debt you have, the more crucial this primary step becomes, because you can not afford to add more issues to what’s already weighing you down.

Step 2- Now you have forestalled more debt from amassing, your next move is to open more avenues to get money to repay your present debt. This is going to be the second thing you do, because many of us attempt to pay down their debt but understand that they have little cash to spare and do not know where to start.

By adding more earnings or freeing up some of your present earnings, you make tackling your debt much better and convenient. There’s no single methodology in releasing or adding revenue, but there are several concepts open to you. Some ideas include having a garage sale, selling new items online, having a tougher corner store budget, eating in more frequently or maybe paying for things only in readies. Choose the best option you are comfortable with, will be the most suitable option to go with.

Step 3- Begin your debt elimination plan by knocking out the debt with the highest interest. This is critical, as you do not want to be paying more then you fully have to. Use that additional revenue you’ve made available to help in paying for it. Look to target your goals way higher than the minimum standard payment.

Instead, try and pay as much as you can now instead of later. Point your concentration on one piece of debt at a time, don’t spread your cash around otherwise it will not feel a bit like you do much progress.

Step 4- Once you have paid off your higher debts, you could have made available even more revenue since you do not have to pay that any more. Don’t stash that additional money into a savings account, or use it to go to a complicated restaurant . Instead, add that portion to the remainder of the money you’ll be using to pay down the debt with the following highest IR. Keep going down the road till you have paid off all the debt.

Though this is quicker said than done, by following this debt elimination plan process you give yourself the tools and mind-set you want to really dispose of your debt once and for all.

Debt Elimination Strategy That Can Lower Your Consumer Debt Payments

Are you searching for a debt elimination strategy that actually works but doesn’t leave you feeling like you’re living life like a miser? The majority of debt elimination strategy advice given tells you to create a budget and cut down on your spending.

While this might be great advice, it’s not always practical. Most people cringe at the idea of making a budget. They immediately conjure images of eating noodles every night and sitting in the dark so they don’t have to switch on the lights and use electricity.

These images aren’t what budgeting is about and they won’t help you to eliminate debt. What you need to think about is finding a way to reduce some of your biggest expenses.

Think about where your money goes each month. You should begin to notice that your credit card and consumer debt repayments eat up a large chunk of your income every pay period. If those payments were lower, would this make your financial situation a little easier? Here’s a quick debt elimination strategy that might help to put you back on track financially.

Step 1: Negotiate

When you consider that repayments on consumer debts are often a large drain on your finances, it makes sense to begin your debt elimination strategy by trying to reduce those payments. Call your lenders and ask them if they’re willing to negotiate for a lower interest rate or reduced fees.

Don’t be surprised if they’re initially reluctant to discuss rate eliminations with you. This is normal. Simply ask to be transfered to their retention department and speak to the representative there. All of the retention staff are hired solely to try and stop customers from leaving the bank.

Step 2: Consolidate

Add up how much you pay on your credit cards and personal loans each month. The total number might be a little scary, but it’s important you know the whole amount. You should also try to find out how much you’re being charged in interest on each of those accounts.

Then call a few different lenders and make some enquiries about consolidating some of these debts into a consolidation loan. This type of loan often carries a much lower interest rate than store cards or credit cards, so you’ll be saving money on interest charges immediately. You’ll also find your repayments should drop down to more manageable levels too.

Step 3: Payment Plans

If you’ve already fallen behind on your repayments, then call your creditors at once and discuss payment arrangements with them. Let them know you had a temporary patch of financial difficulty and you’re working to get back on track. Then look at ways to get those arrears back under control.

Step 4: Avoid Paying Minimum Payments

When your credit card statement arrives, it shows you the minimum payment due for that month. How many times have you paid only the amount the lender asked you to pay? By paying just the minimum amount, you’re barely covering the interest due and it will take you years to pay down that balance to zero.

Once you’ve managed to reduce your monthly payments by either negotiating or consolidating, you should immediately allocate some of the cash you have left over towards paying extra amounts onto your balances.

This basic debt elimination strategy should help you to make a start with your goals for getting rid of your debt burdens. As you begin to see some progress, you’ll find it easier to stay motivated and being looking for other ways to help lower your debts even faster.

3 Debt Elimination Strategies- How to use Free Money to Reduce Debt

Here is article I found that provides 3 debt elimination strategies to eliminate debt using free money!

Free money is sitting in your finances now, just waiting to help you reduce your debt. Without paying more, you can get out of debt sooner by reducing your interest rates on debts. Using a payback credit card can also help you earn money. And finally, budgeting your purchases will help you stay on track to paying off your debt.

Reduce Your Interest Rates

Reducing your interest rates on short and long term debt is the easiest way to reduce your debt. You can transfer credit card balances for better terms. You can also opt to consolidate debt into a low-rate home equity or personal loan.

To get the most benefit of your freed up money, make the same payment on your debt. Making extra principal payments will help you trim your debt load in no time and you won’t feel a pinch in your finances.

While you have those accounts paid off, consider closing those accounts. Keep the oldest credit lines since they benefit your credit score. However, new accounts could needlessly be restricting your credit options in the future.

Get Paid For Using Your Credit Card

Credit card companies compete through their rates and incentive programs. With payback rates up to 5%, you can be earning extra dollars each month by paying your regular bills or buying groceries.

To get the most, use the card to pay for your everyday purchases. Then pay off the entire balance each month. That way at the end of the year, you will have a sizeable check coming your way. Take that free money to eliminate part of your debt principal.

Cash back credit cards usually have higher rates than other accounts. So if you are planning to carry a balance, shop for the lower rates.

Budget Toward A Goal

Trimming expenses from your budget can also help you find free money in your account. For example, late payments on bills are a needless waste of money. Switching to automatic payments can help avoid this cash loss.

When you do look at your budget, plan toward a pay off goal. How much money a month do you want to put toward your debt? Write that check at payday so you won’t be tempted to spend it. Then make the necessary budget adjustments, knowing that you are getting close to being out of debt.

See my recommended Debt Reduction Companies online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

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