So you have made the commitment to become debt free but are wondering what options are available to you? Traditionally most people choose one of the following options:

Debt Consolidation Loans

This loan is acquired to pay off other loans, ideally look for a loan that carries a lower interest rate than what you are currently paying. However, if you aren’t able to lower your rates, you can lower your monthly payments by choosing a longer term loan.

Debt Management Programs

Here a third party agency will negotiate lower rates with your creditors on your behalf, for a small fee.

Credit Counseling

A credit counselor reviews your financial situation and offers suggestions as to the best way to alleviate your debt problems by putting together a debt management plan.

Bankruptcy

This is usually a final strategy if it becomes apparent that your debt management plan is not going to be successful. However, if possible we suggest that you try to avoid this option at all costs as l10 years! During this time it will be very hard for you to obtain loans, housing loans, and car loans at anything close to commercial rates.

But what if none of the above mentioned options work for you and you would like to try to tackle your debt on your own? Then you might consider trying to rectify the situation yourself, here are a few tips:

● Stop accruing new debt. (Before implementing any of the following)

● Develop a budget! Track both your incoming and outgoing expenses. Developing a budget will help you to find many areas where you could save money.  

● Sell assets to pay down debt. A lot of money is being made on sites like EBay; why not get a share of the action by listing some of your items that you aren’t using. Better yet, how about a good old fashion yard sale?

● Pay more than the monthly minimum on your credit cards. Doing this will allow you to pay off the debts faster, also pay more toward your higher-interest cards first.

● Restructure your mortgage payments. This will help to reduce the total amount of interest that you pay while significantly reducing the time that it takes to pay off your mortgage.

● Seek a loan secured on other personal property. If you have assets that you have equity in consider taking out a loan secured by that asset and then utilize those funds to pay down your debt.

Eliminating debt might end up being a lot easier than you think, by taking baby steps you could end up reaping huge financial rewards.

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