Ways You Can Pay Off Your Debt

By: Prudent Financial Services

Introduction

Many individuals have faced a point in their life when they could not pay their bills. The average family has thousands of dollars in credit card debt and on top of that, there is debt from cars, school, and student loans. Paying off debt is not the easiet thing to do so here is a list of methods you can use to help pay off your debt.

Use the Debt-Snowball Method

The debt-snowball method is a debt repayment strategy in which the accounts with the smallest balances are paid first along with payment of the minimum amount on bigger debts. You would gradually pay off bigger and bigger debts until all of your debt is paid off in full. As you go along, there will be a decrease in the number of creditors you owe, increasing you confidence and motivation to pay off your debts.

Credit Counselling

Credit counselling involves reviewing an individual’s or family’s financial situation and establishing solutions to pay the debt off. This is called a debt management plan (DMP). DMPS help individuals become debt-free in maximum four to five years.

Debt Consolidation

Debt consolidation is when all your debt is condensed into one loan which is at a lower interest rate. With debt consolidation, an individual will be able to do more affordable monthly payments. Debt that can be consolidated includes: credit card, personal loans, utility bills and more.Debt consolidation is a useful solution for those who are unable to pay off multiple debts. Using debt consolidation is especially useful if a budget is created to ensure you have some money each month.

Car Title Loans

A car (or vehicle) title loan is one in which a loan uses a paid off vehicle as collateral. Many people with bad credit are unable to get loans through banks and other loan providers. A car title loan is a good option for those who do not have the best credit rating as it only requires a functioning, paid-off car. Car title loans allow you to keep your car and use it as you normally would.

More on Car Title Loans

Lenders of car title loans usually do not check credit but there are some criteria that needs to be met to be eligible for a car title loan including: the vehicle must be insured, must be fully paid off, and must be in the name of the individual who is using to borrow. Some companies provide title loans to those who are self-employed, individuals on pensions, commissions and gratuities.

Advantages of Car Title Loans

1. Short time to process loan request.

2. A credit check is not usually carried out.

3. There is very little paperwork that is needed.

4. Your car is the collateral and you can use it during the loan period.

There are many advantages to using a car title loan to pay off your debt. These advantages include:

Conclusion

Being in debt can be an overwhelming experience. However, it is not impossible to get out of debt. There are many ways you can get out of debt and the sooner you deal with your debt, the less hassle it will be to pay it off. Don’t be afraid to seek help from a financial advisor or a credit counsellor.

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