5 simple ways to pay down your debts

Debts have become part and parcel of our daily lives as human beings. If you are not being chased by student loans then it is car loans, if not then it is credit card loans or even bank loans, if not, it is mortgages, if not then it is all of them.

It is becoming rear to find someone who is not paying off debts. So that is why in our efforts to cut our expenses we also need to learn how we can minimize the amount of money we are spending towards our debt repayment. So how can we go about this?

1. Debt consolidation

It is not uncommon for one person to have debts from different types of lenders. One person can have student loans, car loans, mortgages, credit card loans and many others, all on his or her neck wanting a share of his money.

Now the problem with this is that their management becomes a difficult task and also you end up paying a lot per month towards debt payment than you should. There is a solution to all this and that is debt consolidation.

Debt consolidation is where you take one loan to pay off many other existing loans so you remain with one huge monster to kill. Debt consolidation loans reduces what you pay in interest per month.

Advantages of debt consolidation

A. Easy management

Paying multiple debts at a go may be a difficult task, finding the proper way of paying them may also prove to be a equally difficult task. Debt consolidation Debt consolidation loans makes your debt payment easy to manage because it brings all your debts under one roof. Instead of dealing with several small debts, you only deal with one.

B. Credit score improvement

Debt consolidation will improve your credit score because you will only be dealing with one debt in this case and hence the chance of missing out to pay on one of your many debts because of one reason or the other is zero.

C. Reduces what you spend on payment

The problem of having many debts is that each and every one of them has its own interest rates hence you find that what you spend monthly on paying your debts will be higher compared to when you were paying off a single debt. Debt consolidation offers that.

D. Budgeting made easy

Because of a single interest rate you know how much you should be setting aside towards your debt payment every month with debt consolidation. This makes it easy for you to make your budget and hence the risk of spending your money on things you do not need is eliminated meaning more money to your pockets.

E. Less stress

You are dealing with one monster compared to the stress of dealing with many. You get a peace of mind.

F. Faster debt repayment

The disadvantage of having many debts is that each one of them has its own rates and hence each one of them has its own time of completely being paid off. Some may be longer and this means that you will spend your money on debt payment for a very long time. With debt consolidation, however, you will be able to pay your debts faster.

G. Lower interest rates

If you have many loans, each one of them come with its own rates which end up being very high compared to when you have only one loan you are dealing with.

H. One time payment

You are dealing with only one loan when you consolidate which saves you the trouble of having to pay each one of the loans you have.

2. Look for an extra source of income

Finding an extra source of income can help you pay down debt. You can consider several options that already exist like selling used items which are still in a good condition on Amazon, Bonanza, eBay, eBid, you can also drive for Uber or Lyft, you can start a blog, write ebooks and such like stuff.

3. Prioritize high interest debts

You need to prioritize your high interest debts in order to make sure you are paying less towards interest. The best way of doing this is to pay off those debts with high interest rates first then go to those that have less interest rates.

4. Use cash only

The idea of using cash only whenever you are purchasing things is to make sure you don’t get into more credit card debt.

If you are using cash to make purchases you will not be able to live beyond what your pocket can provide this is because you will be budgeting according to the amount of money you have at that time. You will be more frugal and hence you will not get yourself into more debts.

5. Automate

If you can forget to pay your debts for one reason or the other or you have many loans from different sources and you don’t want to consolidate, this might just be the best option there is for you.

Here, a certain amount of money is channeled directly towards your debt repayment every time you receive your paycheck. It’s easy, efficient and also time saving (if you have to pay many debts). It also eliminates the risk of failing to payback your debt.

Pay down your debts using debt consolidation