Achieving freedom from debt is a matter of serious commitment.
Once you decide to take on a life free from financial burdens, there are affordable means that you can use to achieve your goal.
Unless you suddenly receive a financial windfall, obliterating your debts is not an easy and instant process.
It takes a lot of sacrifice and hard work, but the rewards are gratifying.
Here are some things you can do: Call Your Creditors Some of your existing cards may carry interest rates of as much as 16% or more for every dollar you spend.
Now, it's time to act.
List down all your credit accounts, and note all important information including the rates of interest.
Call each of your creditors and ask how you can reduce the rates.
You may be surprised that a lot of creditors will accommodate requests for rate reduction.
All you have to do is ask.
For lenders, this is better than wait for the borrower to default on his payments.
Just make sure to maintain payments at current levels so you can pay off debt fast.
Snowballing Payments Method In this method, you select from one of your debts and channel a bug portion of your available funds to totally eliminate the balance, and pay off just the minimum for the rest of your accounts.
Selecting to settle the one with the highest interest first will help cut down your future interest payments.
Then move on to settle your next debt, and then the next until everything is wiped clean.
In the meantime, live frugally.
Loans to Consolidate Debt If you do some research, you may find debt consolidation loans that may help you save on interest costs.
These offers can come in the form of credit card bill consolidation, or home equity loans.
But before taking on one of these consolidation offers, make an honest assessment of your ability to pay back.
Defaulting on home equity loan payments, for example, may cause you to lose your home via foreclosure.
If you are not sure you can commit to this type of debt relief programs, you may be better off sticking to other methods like talking directly to your lenders to negotiate.
Other Debt Settlement Options If everything else fails, these may be considered as your courts of last resort.
However, these do not come without any serious repercussions on your credit standing.
- Debt Settlement - This is legal and allows the debtor to settle his obligations by paying only a fraction of what he owes, usually about 40% (or whatever is agreed upon), in lump sum.
This applies for people who have been behind in their payments by several months.
You may choose to negotiate with your creditors on your own, or hire a professional to negotiate on your behalf.
After the payment, the debt will be noted as "settled" in the reports of credit bureaus instead of "paid in full.
" - Bankruptcy - This process requires a lawyer but will allow you to settle your debt in full for as little as 10%.
But take note that this solution has the farthest reaching consequence.
Once you are declared bankrupt, it will take years before you can avail of a loan and it may even affect your status of employment.
Finding ways to repair your credit will be difficult.
The road to freedom from debt is a long and difficult process, whichever path you choose to tread.
But once you get there, the financial peace of mind you will enjoy is priceless.