5 Simple Ways To Reduce Debt Payments

How You Can Reduce Your Monthly Debt Payments

An Advanced Strategy In Debt Reduction:

These 5 simple steps to reduce debt are designed for those who are truly struggling with their unsecured debt. There are basic debt reduction steps you can take that are outlined here. The methods listed below are more of a last Hoorah! Before a complete debt settlement or bankruptcy decision is made. Please feel free to contact us if you’d like a free debt diagnosis to find out where you might stand and what your next move should be.

Reducing monthly debt payments isn’t rocket science. All it takes is a little organization and determination on your part. If you find yourself struggling to make the minimum payments, and you’re continually watching your balance climb due to high interest rates, give at least one of these options a try. In most cases 2-3 of them will take a substantial load of your back and free you of the stress your unsecured debt has so kindly placed on you.

 

1. Transfer Credit Card Balances:

This option may not be available for everyone, but if your credit is still in good shape there are plenty of offers out there for you. Most of the time you can get a balance transfer credit card at a rate much lower than your present credit card interest rate. ┬áIf you do your homework, you can find credit cards offering extremely low introductory APR’s on all credit card balance transfers. There are a few credit card programs left that even offer 0% introductory APR’s on balance transfers; utilizing this period to make interest free payments is extremely beneficial.

 

2. Negotiate Debts With Creditors:

Again, this may or may not work depending on if you’re still current on your payments, and who your creditor is. Unfortunately most creditors are unwilling to negotiate if you’re still making your monthly payments on time. If you are current, and don’t want to “settle” your debt, call and talk to each individual creditor and let them know you’ve run into some sort of hardship. Make sure you’ve got all your facts and figures straight before making the call, this way you know exactly what you’re able to pay to them each month and what your current balances are. In some cases they may even reduce your APR in attempt to assist you.

On the flip side of this, as we’ve mentioned above, it seems the majority of companies out there are unwilling to negotiate anything until you’ve defaulted 3-9 months. This is the start of Debt Settlement, which is talked about in more detail HERE.

 

3. Consolidate Your Debt:

Using a debt consolidation company is something that we at Total Debt Network don’t necessarily recommend, and here’s why. In very few cases can a debt consolidation program TRULY help you out? The majority of the time, it only looks better on the outside. Sure your interest rate is a little lower and your payment is a bit less, but generally the terms have been lengthened. Meaning, you’re in debt longer which negates the little savings you’ve accrued anyway.

There is a way to consolidate your debt that we do recommend. If your credit is still intact, head over to your personal bank or credit union and apply for a personal loan. Your interest rate on a personal loan is going to be a fraction of your credit card rates. Pay off your credit cards with your personal loan and not only have you dropped your interest rates, you’ve consolidated all your debt into one place. If possible, this is the best way to consolidate your debt.

 

4. Find a Good Credit Counselor:

A good professional credit counselor can assist you in showing you the fastest and most effective path to becoming free of debt. A credit counselor will assess your debt, negotiate rates down for you, help you out with a manageable re-payment plan, and educate you in the process. Credit Counselors come up with what is called a Debt Management Plan (DMP) after looking over all your accounts and evaluating your finances. From there they will submit this to all of your creditors for acceptance. The credit counselor disburses your monthly payment to each of your creditors as per the DMP.

Even though these credit counselors do not possess any powers over you, most find the convenience of someone else going through the negotiating for them. And obviously, they have the training and skills that the average consumer doesn’t when it comes to debt and how to deal with it. Most consumer credit counselors are “non-profit”, this does NOT mean they won’t charge you some sort of fee for their service. Do your homework before committing to any sort of program of this nature, you should never pay for a simple analysis of your situation.

 

5. Bankruptcy:

This should be the very last resort. If you’re completely drowned in debt and have exhausted all other options, bankruptcy may be the only choice. Bankruptcy can provide you with the clean slate you desire, but the cons will definitely out weigh the pros, so make sure to consult your financial advisor before making any decisions. We go into detail about bankruptcy HERE.

Educating oneself is one of the best things you can do while reducing your debt. By educating yourself, it ensures that you won’t make the same mistakes again and you’ll have a much brighter picture of what debt really is.

Please contact us for a free debt analysis and consultation or simply fill out the form to the right and one of our debt professionals will contact you shortly. We can arm you with the ammo necessary to gain back your freedom of debt.

 

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