Personal Finance

7 Simple Tips on How to Clear Your Debts

Are you in debt? Does it have a tight hold on you? Well, you’re not alone. Many people face financial worries that they just can’t seem to get on top of. However, it is possible to rid yourself of debts. 

In this article, we’ll give you some great tips for ways that you can clear your debt and stay debt-free. 

Consolidate Your Debts 

One of the best ways of clearing your debt is to consolidate it. If you have multiple debts then you can bring all of these together into one single loan. 

Having a consolidation loan in place will mean that you will only have one payment to deal with and you will have a date in view for when you will have paid everything off by. 

Pay More Than The Minimum 

When you are in a lot of debt, it can be hard to see the light at the end of the tunnel. You may be making your minimum payments each month, but your debt may not be doing down as quickly as you might like it to. 

Where possible, you should pay more than your minimum payment each month. Try and find any spare money that you have and use it to pay off your debts. 

Prioritize Your Most Expensive Debts

When paying off your debts you should at least pay the minimum amount on each one. But in addition to this, you should work at paying off your more expensive debts first. 

When we talk about expensive debts, we don’t mean the debts that are the biggest or have the largest monthly payment each month. We are instead talking about the debts with the highest interest. These might include credit cards and payday loans. You should make these a priority and pay them off as quickly as possible. Any spare money that you have should be plowed into paying off these expensive debts. 

Once you have paid off your most expensive debt, move onto the next most expensive debt and deal with them all in the same way until you are debt-free. 

Take On A Part Time Job 

If you want to get on top of your debt then you may need to consider increasing your income. One of the easiest ways of doing this will be to take on a part-time job around your existing work. 

Try to ensure you use all of the income from your second job for paying off your debts. Remember, you’re only taking the second job while you pay off all of your debt. Once your debt is cleared, there won’t be the need to carry on working two jobs. 

Refinance Your Mortgage 

If you have had a mortgage for a few years, then you may be able to refinance this to help clear your debts. Check with your lender to find out whether you have built up enough equity in your home to benefit from refinancing your mortgage. 

Remember, refinancing a mortgage is a major step and you should get as much advice as possible before exploring this option. You should also be aware that it is not something that should be done lightly. It will add to the length of time that you will have remaining to pay on your loan. 

Balance Transfer 

If you have a lot of credit card debt, it can be hard to pay this off. Often, your minimum payment is likely to only cover the interest that gets applied each month. That means that when you’re just paying the minimum payment your debt never goes down. 

One option open to you is to take out a balance transfer on your credit card. This means moving the debt to a new card that offers 0% interest on balance transfers. Once you have done this, you can set to work paying off the debt. 

Be sure and find out how long the 0% offer is valid for and switch cards again when the offer expires. 

Get Your Debts Written off 

If you are really struggling with debt, one option that may have available to you is a debt discharge. This will help you clear all of your debts and unburden you of your responsibility to any lenders. Check out this DTSS review for more ways to rid yourself of debt. 

Taking on a debt discharge is not something that should be done lightly. Seek out professional financial advice before you take this route as it may affect your credit rating. 

We hope that these tips and advice on how to clear your debts is helpful. If you have more questions don’t hesitate to get professional advice!