Here are five ways to pay off debt if you feel that you are spiraling out of control.
In this era of a contracting economy, you can no longer afford to carry high consumer debt loads.
1.
Pay more than the minimum.
Just because the minimum monthly payment on your credit card is $100, it doesn't mean you can't pay $150.
That extra $50 will all go to principle, not interest.
This may mean that you have to live below your means for a time being.
But it will be worth it in the long run when your credit card statement reads "zero.
" 2.
Transfer high rate balances to lower ones.
If you have room on your low rate credit cards, transfer higher rate debt to them.
You will start saving money immediately.
Pay particular attention to cards you might have obtained with "teaser" rates that have gone up to a higher amount.
If you can, you may even want to apply for more low rate credit and transfer the balances you have.
3.
Raid your savings.
Your savings account is probably not paying out much in interest.
If you use your savings to pay off your credit cards, you will effectively be getting a higher rate on the money.
If you use the money in the bank as a "rainy day" account, keep some of the credit lines open so that you can use them in an emergency.
4.
Cash out or borrow against life insurance.
If you have a whole life insurance policy, you can borrow against it to pay off your loans.
If your children are grown, you may even want to cash it out entirely as you no longer need the security of the insurance.
5.
Renegotiate with your creditors.
Creditors realize that not everyone can pay back their loans in full and are sometimes willing to settle for a lesser amount.
Typically, if a person is seen as a loan risk, the companies will settle for 75 to 80 cents on the dollar.
So, those are 5 ways to pay off debt.