The Finance Blogger

Pay Off Debt the Right Way

Pay Off Debt the Right WayConsumers can save themselves a great deal of money if they can pay off debt the right way. They can reduce the overall amount of interest they pay on this debt. Consumers can also reduce their monthly payments as well and that leads to an easier financial lifestyle. In this post we will discuss some of the key steps or guidelines to follow. They will lead to a healthier financial lifestyle and leave money in your pocket to be used for other priorities. Aside from the obvious, i.e. don’t get into debt in the first place, paying off debt the right way is something to pay attention to.

Pay Off Debt the Right Way

Pay off high interest rate debt first – if you have a mixture of different kinds of debt at various interest rates, it makes sense to pay off the high interest debt first. Credit cards typically have higher interest rates than do personal loans for example. Either consolidate the credit card debt with a low interest personal loan. Or pay them off before paying down other lower interest debt.

Avoid pay day loans – payday loans are among the most expensive loans available with high interest rates and fees that are charged. Avoid pay day loans like the plague. Even credit card debt costs less than payday loans will cost. If you have a payday loan, this is the first debt that should be fully paid to reduce the significant expenses associated with carrying this kind of loan.

Avoid zero interest credit cards – these kinds of cards are great if you have the discipline to avoid carrying a balance after the initial grace period.  Once the grace period is over, the full debt is charged at the prevailing interest rate. Which is usually in excess of 20%.

Don’t Panic

Don’t panic, get advice. – If you have a lot of debt and are worried that you cannot see a way out of the mess, seek some advice from professionals. Beware of anyone who is trying to sell you a financial product as a solution. Although it could be the right answer, it can and will likely cost you even more money.

Avoid band aid approach – figure out the best long term approach. Band aid approaches are usually just that and will just help you financial situation get worse. Seek advice, develop a plan that is focused on meeting short term issues as well as the long term debt. Then implement that plan with the goal of being debt free as soon as possible.



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One Response to “Pay Off Debt the Right Way”

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