If debt free and worry free living are something that sound good to you, then you're in the right place. We're about to go over a plan that will help you eliminate your debt faster than you ever thought possible!
1. Get your spending under control. Stop buying anything with your credit cards unless it is something that is absolutely essential to live and you can pay off the balance in full at the end of the month. You need to stop accumulating bad debt.
2. On a sheet of paper or in an excel spreadsheet, list all of the people or creditors that you owe money too. Next to each name, list the current balance or total amount owed, the interest rate, and the minimum monthly payment.
3. Rank your debts by interest rate, starting with the highest rate first. Another way to do this would be to rank your debt by the lowest current balance first. Which way you choose will depend on your level of motivation. By paying off your higher interest debt first, you will be saving yourself some money in the long run. But if you're desperate to see something happening with your plan, you might want to pay off smaller balances first to keep you motivated.
4. This step might be rough, especially if you're already struggling to get by. But you need to find some extra money that you can apply to your debt reduction plan on a monthly basis. Obviously the more money you can come up with the better, but anything will help. As I mentioned, finding extra money is not always easy, but if you dig deep enough you can usually find some unnecessary expense that can be cut out, such as smoking, t.v., or paying for that coffee on the way to work. You can then use that money towards debt reduction.
5. Starting with the debt you decided to rank #1, make your minimum monthly payment plus the extra money you came up with. On everything else, make the minimum monthly payment only. Continue to do this every month until the first debt is paid off. On the following month apply the minimum monthly payment from debt #1, the minimum monthly payment from debt #2, and the extra money to debt #2. Continue to make the minimum payment on everything else. You will follow this pattern until your debt is completely eliminated. Good luck!
Friday, March 28, 2008
3 Tips for Debt Relief Plan
The only way to eliminate debt is to create a realistic plan of action for repaying creditors. Fortunately, there are numerous ways to reduce debts, which lower your monthly obligations. Fewer bills mean more money, which can be used for other things. Before considering bankruptcy or a type of debt settlement, consider the following tips for eliminating unnecessary debts.
Pay More than the Minimum Payment
If you want to payoff credit cards, intend on paying more than the monthly minimum. If possible, double or triple the amount due. The best way to quickly payoff credit card balances is to apply a lump sum of money toward the debt. This money can come from second employment, income tax return, the sale of a personal item, etc. Another tactic for reducing a credit card balance involves obtaining loans or cash gifts from friends or family members.
Acquire a Bill Consolidation Loan
Bill and debt consolidation loans are ideal for persons hoping to become debt free. If you own a home, consider a home equity loan or cash-out mortgage refinancing. The funds acquired from the transaction can be used to payoff high interest credit cards and other debts.
Home equity loans create an additional loan. Because these loans have low rates and fixed terms, they are normally easy to repay. If choosing the refinancing route, the monies received are wrapped into a new mortgage loan. Hence, the amount owed on your home will increase.
Other methods of bill consolidation include obtaining a secured or unsecured personal loan from a financial institution. If you cannot qualify for a consolidation loan, seek the help of a debt management company.
Obtain a Credit Card Balance Transfer
Individuals with excessive credit card debt generally cannot fathom obtaining a new credit card. However, credit cards offering balance transfers at an introductory rate of zero percent provide an effective means of eliminating debt. For the most part, zero percent is offered for the first 12 to 15 months. This allows ample time to reduce or eliminate the credit card balance. Because zero percent only applies to the balance transfer, avoid new credit card charges.
Pay More than the Minimum Payment
If you want to payoff credit cards, intend on paying more than the monthly minimum. If possible, double or triple the amount due. The best way to quickly payoff credit card balances is to apply a lump sum of money toward the debt. This money can come from second employment, income tax return, the sale of a personal item, etc. Another tactic for reducing a credit card balance involves obtaining loans or cash gifts from friends or family members.
Acquire a Bill Consolidation Loan
Bill and debt consolidation loans are ideal for persons hoping to become debt free. If you own a home, consider a home equity loan or cash-out mortgage refinancing. The funds acquired from the transaction can be used to payoff high interest credit cards and other debts.
Home equity loans create an additional loan. Because these loans have low rates and fixed terms, they are normally easy to repay. If choosing the refinancing route, the monies received are wrapped into a new mortgage loan. Hence, the amount owed on your home will increase.
Other methods of bill consolidation include obtaining a secured or unsecured personal loan from a financial institution. If you cannot qualify for a consolidation loan, seek the help of a debt management company.
Obtain a Credit Card Balance Transfer
Individuals with excessive credit card debt generally cannot fathom obtaining a new credit card. However, credit cards offering balance transfers at an introductory rate of zero percent provide an effective means of eliminating debt. For the most part, zero percent is offered for the first 12 to 15 months. This allows ample time to reduce or eliminate the credit card balance. Because zero percent only applies to the balance transfer, avoid new credit card charges.
Friday, March 14, 2008
People Drowning In Debt Crisis
Most people are drowning in debt and do not know what they are going to do. It is possible that you are in this situation and have spent to much on your credit cards. You may even be looking for a way out of this mess and need help. Not to worry there are some methods that you can use to erase your debt and get you on the road to being financially debt free.
Government Grants - Every year the Government gives away money in the form of grants for many different reasons. It is possible that you can obtain a Government Grant to pay of your credit card bills and become debt free. The money that they allocate is based on need and not on want. When you are filling out applications it is important for you to let them know that this is the only way you will be able to get out of debt.
Tax Refunds - You should really try paying extra money every month on your credit card debt. You can save lots of money in interest if you pay even a small amount every month. You tax refund is a great way of paying down your debt and will save you tons of money in interest.
Selling Stuff - Do you have a bunch of stuff laying around your house or in your garage that you don't use anymore. The saying goes, "One Man's junk is another Man's treasure." You need to gather that unwanted stuff and try selling it on ebay or craigslist. You will be surprised how much extra money you can obtain to pay off your credit card debt.
Government Grants - Every year the Government gives away money in the form of grants for many different reasons. It is possible that you can obtain a Government Grant to pay of your credit card bills and become debt free. The money that they allocate is based on need and not on want. When you are filling out applications it is important for you to let them know that this is the only way you will be able to get out of debt.
Tax Refunds - You should really try paying extra money every month on your credit card debt. You can save lots of money in interest if you pay even a small amount every month. You tax refund is a great way of paying down your debt and will save you tons of money in interest.
Selling Stuff - Do you have a bunch of stuff laying around your house or in your garage that you don't use anymore. The saying goes, "One Man's junk is another Man's treasure." You need to gather that unwanted stuff and try selling it on ebay or craigslist. You will be surprised how much extra money you can obtain to pay off your credit card debt.
Thursday, March 13, 2008
Negotiating Lower Debt Payments With Creditor
Think you need to have professional finance training to negotiate lower debt payments with your creditors? Well, you don't. In fact, while many Americans opt to speak with a financial advisor about negotiating lower payments, the simple truth is that you don't have to do much more than reach out and negotiate on your own behalf in order to reach a fair agreement. The key is knowing how to do this, what to say, and how to say it.
If you're thinking about negotiating lower debt payments with a creditor, the first step is to craft a professional letter indicating your interest. This gives your creditor a full explanation of how and why you need to negotiate your debt. Have you recently lost your job or had to undergo a long hospital stay? Include these bits of information in your letter.
Don't lie, but don't forget to include any pertinent information about your credit history that explains why you're asking for lower debt payments or even total debt settlement. Creditors are usually interested in making their money back and making a profit, but they are mainly concerned with bringing money back their way. This is not possible if you're on the brink of bankruptcy, so they are usually willing to listen to your negotiations and work with you to some degree.
Properly explaining your credit struggles
As you're crafting the letter and eventually preparing to reach out to your creditor to further discuss negotiating your debt, the second step is to properly explain why lowering your debt payments is necessary and how it will benefit both sides in the deal.
As stated earlier, creditors are in the business of making money. But they also need to know that you're not simply looking for a quick way out and a quick settlement that will only benefit you. Be ready to provide specific evidence pointing towards your need for debt negotiation. Do you make less than you need to survive every month? Has some event out of your control caused you financial strain? Are you a regular customer of your creditor but run into hard times? Be thorough in your explanation.
Negotiating your credit with a professional
If you can afford to speak with a professional financial advisor, the third step in debt negotiation should be to do so immediately. They can help you through the negotiating process and even work on your behalf to speak to creditors and find a solution to your dilemma. Many creditors will also try and take advantage of those who try to negotiate debt payments on their own.
By bringing a professional into your corner, you will be at a clear advantage and will have the opportunity to win a more favorable negotiation from your creditor. You can also speak to the professional about different ways to stay out of credit trouble in the future. By establishing some sort of budget and learning more about interest rates and minimum monthly payments, you may find that staying out of debt is something that is attainable for you.
But, for now, focus on the negotiation process and how you can work with your creditor to handle negotiating your debt payments in a timely manner. Be sure to stay away from any deals that could hurt your credit. In the end, you'll be much happier with less debt on your plate and more committed to eliminating your debt wholly. Get started today and find out how easy it can be to negotiate your debt.
If you're thinking about negotiating lower debt payments with a creditor, the first step is to craft a professional letter indicating your interest. This gives your creditor a full explanation of how and why you need to negotiate your debt. Have you recently lost your job or had to undergo a long hospital stay? Include these bits of information in your letter.
Don't lie, but don't forget to include any pertinent information about your credit history that explains why you're asking for lower debt payments or even total debt settlement. Creditors are usually interested in making their money back and making a profit, but they are mainly concerned with bringing money back their way. This is not possible if you're on the brink of bankruptcy, so they are usually willing to listen to your negotiations and work with you to some degree.
Properly explaining your credit struggles
As you're crafting the letter and eventually preparing to reach out to your creditor to further discuss negotiating your debt, the second step is to properly explain why lowering your debt payments is necessary and how it will benefit both sides in the deal.
As stated earlier, creditors are in the business of making money. But they also need to know that you're not simply looking for a quick way out and a quick settlement that will only benefit you. Be ready to provide specific evidence pointing towards your need for debt negotiation. Do you make less than you need to survive every month? Has some event out of your control caused you financial strain? Are you a regular customer of your creditor but run into hard times? Be thorough in your explanation.
Negotiating your credit with a professional
If you can afford to speak with a professional financial advisor, the third step in debt negotiation should be to do so immediately. They can help you through the negotiating process and even work on your behalf to speak to creditors and find a solution to your dilemma. Many creditors will also try and take advantage of those who try to negotiate debt payments on their own.
By bringing a professional into your corner, you will be at a clear advantage and will have the opportunity to win a more favorable negotiation from your creditor. You can also speak to the professional about different ways to stay out of credit trouble in the future. By establishing some sort of budget and learning more about interest rates and minimum monthly payments, you may find that staying out of debt is something that is attainable for you.
But, for now, focus on the negotiation process and how you can work with your creditor to handle negotiating your debt payments in a timely manner. Be sure to stay away from any deals that could hurt your credit. In the end, you'll be much happier with less debt on your plate and more committed to eliminating your debt wholly. Get started today and find out how easy it can be to negotiate your debt.
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