According to some news sources, Americans are living wildly beyond their means with an average debt of nearly $140,000. Some sources report that credit card debt is anywhere from $8,000 to $15,000.
For an individual who is ready to get out of debt there are some options he or she can pursue to help get out of debt quickly and effectively.
First, there are several loans you can consider to consolidate your debt into a lower interest payment. For example sometimes people refinance their credit card debt into a mortgage payment. This generally, if you have a good credit score and enough equity in your house, can lower your monthly payment.
For an emergency situation, sometimes people consider a car title loan however these generally have higher interest rates, but can be better suited than payday loans depending on your situation.
What will determine what makes the most sense for you depends on interest rate, and that is normally determined by your credit score and your collateral you have available to you. For example, a mortgage is generally a lower interest rate because the bank has the home as collateral, vs. unsecured debt like a credit card is very risky to banks, hence why it has a higher interest rate.
If you can’t qualify for a loan consider some of these other options to pay off debt quickly. First, look around your house or apartment. What can you sell? You can, within a matter of minutes, start selling things on Facebook Marketplace or Craigslist. De-cluttering your living space has many health benefits, and many times just the reduction in stuff and clutter will help you.
If you don’t have a lot of stuff to sell you first need to get a handle on the current debt you have. There are different methods of doing so, but one option is to use a debt calculator and pay off certain credit cards first. Once those are paid off you use the money that used to go to the payment and put it towards the credit card. Sometimes this is called a “debt waterfall.”
Earning extra or more income always helps, but that always comes with having to pay more taxes. That being said, it is great to earn more money so you can pay off debt faster. Consider working overtime, or getting a second job. There are various freelancing websites that exist if you have writing skills or other skills that can be done online.
Finally, once you do get out of debt, consider starting an emergency/savings account. Strive to put around 6 months of salary in this account so you can withstand an emergency and avoid having to go into debt in the future. Whatever you do, try to avoid credit cards, because the interest rate on those can be so high.