Then, you applied for your first credit card, mortgage or car finance deal, and the debt began to pile up. Now that you have a sizable portion of debt, you need to take control of your financial situation. Here are some tips to get started:
Use Your Cash Rewards
Chances are, one of those credit cards in your wallet has some cash rewards attached to it. Instead of using that cash for a dinner out or for a new electronic gadget, put it to work by paying off your debt. If you are responsible enough with money to do so, continue to make purchases on your credit card. However, pay them off immediately. Then, you can keep using the rewards to pay back the debt.
Stop Paying Only the Minimum
Putting only the minimum amount of money on your credit cards until they are paid off may mean that you are attached to this pile of debt for years to come. Even if you put just a few extra dollars on to the balance for now, you can work to build up a larger sum in the future. Perhaps you have a few extra dollars leftover from lunch at work today. Put them immediately toward your credit card so that you are not tempted to spend more.
Consider a Home Equity Loan
If you have a certain amount of equity in your home, meaning that the current appraisal value of your house is greater than it was when you purchased it, you can take out a loan. Use that money to pay off your credit card debt. The amount of that loan will be added onto your mortgage. Texas hard money lenders at Ellis Equity can help you quickly withdraw equity out of your land.
Obtain a Traditional Loan
When you are not a homeowner, or when a home equity loan is not an option for you otherwise, you can still consider a traditional loan. You will still have debt; however, it is no longer revolving debt, which can have a different impact on your credit report. Also, instead of paying for a variety of interest rates, you will just have one on the new loan.
Research Forgiveness Programs
Some people scoff at the idea of loan forgiveness and assume that such a program is not for them. Instead of immediately building a barricade to the idea, find out if you qualify. Even if you qualify for partial loan forgiveness only, at least the amount in front of you won’t appear so insurmountable.
Trying these different strategies can put you into a better situation with debt so that you can set even larger financial goals. Be sure to carefully consider all of your options and work with professionals for the best outcome.
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