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 us through the day, which can sometimes mean that there’s zero left over on our bills. If that sounds like you, we suggest setting up automatic bill payments through your banking system. That way, your bills are paid without you even realizing it, which allows you to boost your credit score and decrease your debt. There might not be enough left over, but simple lifestyle changes (just while you’re paying off your debt), such as riding public transit instead of driving, can help you in a big way.
#2: Pay More Than the Minimums
The easiest way to get trapped in an endless cycle of debt is to only the pay the minimums on your credit card. There are a few negative side effects of only paying your minimums: your debt repayment period will take forever, your credit score will start to drop, and you’ll be stuck paying higher interest. If you can manage to pay double the minimum amount, you can expect to pay off your debt in half the time.
#3: Focus on Paying off High-Interest Debt
You have three credit card bills sitting in front of you and you have to decide how to divide your money. Rather than paying off all your credit cards equally, add a little bit extra to the debt that has the highest interest rate. It’s vital that you get that debt down as soon as possible, otherwise your money won’t go as far as it needs to. And while we’re on the subject of paying off high-interest debt, it doesn’t make any sense to stow away money in a savings account if you have high-interest debt. The amount of interest you gain from keeping your money in a savings account is completely negated by the much-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 of the month and at different 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.