Nobody wants to stay in the vicious circle of debt forever. The point of paying your bills is to eventually be free from heavy interest rates. But sometimes it feels like an impossible task. So, how does someone say good-bye forever to their debt? Here are five simple ways to help you pay down your debt faster:
#1: Set up Automatic Payments
We lead busy lives. Paycheques come in, bills are due, the fridge is bare, and the gas tank is empty. We pay for what we need to get through the day, which can sometimes mean nothing left for bills. If that sounds like you, we suggest setting up automatic bill payments through your banking system. You will end up paying your bills without thinking about it, while helping boost your credit score and decrease your debt. Disposable income may be hard to find after paying off your bills. However, simple lifestyle changes such as riding public transit instead of driving, can help you in a big way.
#2: Pay More Than the Minimums
Only paying minimums on your credit cards is the easiest way to get trapped in an endless cycle of debt. Only paying minimums can have a few negative side effects:
- The debt repayment period will be prolonged
- Your credit score will start to drop
- You will be stuck paying higher interest
If you can manage to pay double the minimum, you can expect to pay off your debt in half the time.
#3: Focus on Paying off High-Interest Debt
When deciding how to divide your money between credit card bills, equal isn’t always better. Rather than paying all cards equally, add a little bit extra to the debt with the highest interest rate. It’s vital to pay that debt down faster, or your money won’t go as far as it needs to. When focusing on high-interest debt, it’s also important to realize that keeping your money in a savings account isn’t beneficial. The interest gained from your savings account is completely negated by the higher interest rate of your bills.
#4: Ask for a Lower Interest Rate
Believe it or not, credit card companies can be perfectly reasonable. If you let them know that you’re having trouble paying off your credit card, they may offer you a much lower interest rate. It never hurts to ask or to find out what your other options are. You won’t be penalized either. The worst that can happen is that they will say no.
#5: Consolidate Your Debt
One of the most effective ways of paying off your debt faster is to consolidate your debt with another loan. As strange as that may sound at first, debt consolidation loans make your life much easier. Rather than owe several companies money at different times and interest rates, debt consolidation loans allow you to focus on one debt amount and one easy interest rate. LoanConnect works with trusted Canadian debt consolidation companies that will consolidate your loans into one easy monthly payment with financing as low as 0% APR. All you have to do is apply with LoanConnect and our partners will negotiate repayment with your creditors.
Want to learn more about debt consolidation? LoanConnect is Canada’s number-one site for debt repayment alternatives. Check out our FAQ page or apply for a loan today.