3 Strategies to Pay Off Old Debts

Paying off old debt is a priority for many people. Getting rid of the debt that has been hanging around for years can help free up resources for other things. When you pay off old debt, you will feel like a burden has been lifted off of your shoulders. While most of the time, getting rid of the debt is a priority, not many people actually know how to do it. Here are a few strategies that you can use to eliminate old debt.

1. Balance Transfer

One trick that has emerged in recent years is to transfer your accounts to a new credit card with an introductory APR. Many credit cards offer an introductory zero percent APR. The term might be as long as 18 months in some cases. If you have old debt that has been sitting on your other credit cards for a while, you should transfer this debt onto the new card. This will give you 12 to 18 months to pay off the debt with zero percent interest. If you don't get it paid off in time, you are back in the same situation you are in now. Therefore, you can at least pay off as much as you can in that time and then worry about how to handle any remaining balance later.

2. Cut Back

One way to pay off your debt faster is to allocate more of your money towards the debt. In order to do that, you will probably have to cut back on some things in the meantime. First, sit down and look at everywhere that your money goes over the course of a month. Ask yourself what could be taken out and not affect your life too negatively. If you have to do without expanded cable for a while or the internet, you could probably continue living. If it helps you pay off your debt faster, it is well worth the sacrifice. Most people spend four or five dollars a day on coffee and a bagle. They will go out to eat and spend eight or ten dollars instead of packing their lunch for two. Making little changes can go a long way towards saving you money and paying off your old debt.

3. Debt Consolidation

Debt consolidation can do wonders for helping you pay off your old debt faster. With a debt consolidation loan, you can get all of the different debts in one place and focus on paying it off. When everything is spread out, it becomes harder to keep track of. When you get it in one place, you can put all of your energy in one place. If you use a home equity loan to consolidate the debt, you will also be gaining a tax advantage. Any of the interest that you pay on the loan is tax deductible. You will also likely pay a lower interest rate on the money you are borrowing than you are currently paying.


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