Finding effective ways to pay one’s debt is important. Ultimately, debt holds us back from financial freedom. Thus, deciding the best approaches to paying debt can be the easiest way to a debt-free life.
Pay Off Loans With Highest Interest Rates
Stay on top of all of your loans. Track the interest rate and principal on each loan. Ensure that it is being credited properly. When deciding what loan to focus on first (it’s important you’re paying on all of them to avoid default), pay down the loan with the highest interest rate to save yourself money in the long term.
Borrow From Life Insurance
Do you have a life insurance policy? If this policy has a cash value, you can essentially borrow against your own money. Many people decide to do this with their life insurance or even their retirement accounts to get themselves out of debt. This will allow them to lower their bills monthly and enjoy life while they can.
Pay More Then Minimum
This should be obvious for most people with debt. However, if you figure how much interest you’re paying and how long it would take you to pay the loan if you just pay the minimum, you would be shocked. Even paying $10 more than the minimum payment required will help you get out of debt faster.
While these are just three ways to pay debt off faster, there are countless more. Each person should research ideas for their particular debt situation—such as using a vision prepaid card—and decide what works best for their financial future. Good luck!