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Amy Nickson On 7th May,19
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7 Solid actions that can help you be debt free faster
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Some solid actions that can help you be debt free sooner

The debt problem is plaguing our entire nation. People are in more than a trillion dollar in credit card debt and auto loan debt. People are also drowning in mortgage and student loan debt.
Unfortunately, accumulating debt is easier than getting rid of them.
The unpaid bills can wipe off your sleep at night. You will get collection calls; it stays on credit report for many years (7 years), and your credit score will drop.
So, if you have debts, you should try to become debt free as early as possible.Unfortunately, it feels like it takes forever to become debt free when the debt amount is huge.
But, getting out of debt fast is important, otherwise, you will lose more money on making the interest payments on the debts.
Well, taking some solid actions can help you become debt free faster.

Action 1: Make a list of your debts

The key to becoming debt free fast is figuring out how much debts you owe.
List all your debts including the name of the creditor, interest rate, monthly payments, and due dates, in a spreadsheet. It allows you to see your total debt picture.
You can easily understand which debt has a higher interest rate and costing you a lot of money.
However, creating the list is not enough; you have to update the list every few months as the debt amount is changing each time you are paying bills.

Action 2: Estimate how much you can save toward paying off debt

To get debt free faster, you need to analyze your monthly income and obligations.
It will help you decide how much money you can contribute toward paying off your debts every month.
To do so, you need to calculate your debt to income ratio (DTI).
By calculating your DTI, you can understand how much of your income is required for your monthly debt payments.
The DTI calculation is not difficult. Use this DTI calculator to know your DTI ratio by following just two simple steps.

Action 3: Revisit your budget

You shouldn’t depend on your credit cards for paying your monthly bills or other debt payments.
If you see that your income is not sufficient to meet all your monthly obligations, then you need to create a monthly budget very carefully.
Cut down extra expenses aggressively so that you can make monthly debt payments along with paying other essential bills.
Creating a budget is not scary; use an online budget planner or a budgeting app for the great start.

Action 4: Know all debt relief methods

Choosing the right strategy is important when it comes to becoming debt free faster. Some debt relief methods work great to get out of debt faster.
However, you should understand your debt situation to decide the right debt pay off method.
For example:

  • If the debt amount is huge and the debt collectors are hounding for money, then bankruptcy will be the only solution to stop them harassing you.
  • If you are unable to manage your multiple debts, but you are willing to pay them off in full, then debt consolidation program will be the right option.
  • If you think you can’t pay off the entire debts, but paying off a portion of debts is possible, then approach the creditors or collectors for debt settlement.

Here is the detailed analysis of professional debt relief options:

 

1. Debt consolidation program

You can consolidate debts by enrolling in a debt consolidation program.
The company negotiates with your creditors to get a lower interest rate on your debts so that it’s easier for you to repay them.
Moreover, by enrolling in a consolidation program, you can repay debts with the help of making single monthly payments.

2. Debt management program

Debt management program also allows you to pay off debts at a lower interest rate. The program also offers a free counseling session.
The credit/debt counselor will negotiate with your creditors to get a reduced interest rate on debts.

3. Debt settlement program

If you can't repay the total amount you owe, you can go for debt settlement. If the creditors feel that you’re unable to pay off the debts in full, then they may agree to the settlement offers.

Action 5: Consider debt counseling to get the best suggestion

Managing a lot of debts is not easy, especially when you have limited income and a lot of other monthly bills to pay every month. It can be also overwhelming to understand which debt payoff strategy will work best for you.
Don’t panic!
You can get help through debt or credit counseling. It is a process to help debtors to pay off debts through financial education, budgeting tips, bills managing guidelines, and other financial tips.
Thus, it is recommended to consider credit counseling to get the best advice.
The debt counselor will assess your financial situation, calculate your income and expenses, before recommending any debt relief strategy.
The debt counselor also guides you to stay away from further debts.

Action 6: You can pay off debts on your own

You can be debt free on your own by following some do-it-yourself debt relief options like transferring the balance to another credit card, following debt snowball method, or paying off the highest interest rate debt by following debt avalanche method.
But you should understand all the processes first. It will help you choose the method that suits you the best. However, the do-it-yourself debt relief process can take longer time.
So, you can consider a professional debt relief method. Enrolling in a professional debt relief program can help you pay off debt easily and you’ll get complete guidance.
However, you should be careful while choosing a professional debt relief company. It is best to find a law firm who provides debt settlement service if you want to opt for settlement.

Action 7: Wait for your positive result

The debt payoff success rate by enrolling in a professional debt relief service is higher than do-it-yourself debt relief strategies.
Getting help from a professional debt relief company can increase the chances of paying back debt faster. You may not be able to get out of debt fast on your own.

Discover how a real client got out of debt:

OVLG client NG1 explained - “...I'm glad they have help out there where people can get out of debt…”
Know more about her success story.

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Last Updated on: Tue, 7 May 2019

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