Four Ways to Pay Off Your Debt
Did you know that 80% of Americans have some kind of debt? You are not alone if you feel weighed down by the amount of money you owe to other people, but it is the goal to eventually be part of the 20% with no debt burdening you. It is a slow, long process, but eventually, slow and steady will win the race, and your debt will get paid off. Here are four things you can do to get there, thanks to Bankrate.
1. Put it all on a credit card
Though it may not be the best solution, many people find it is easier to transfer debt to a credit card than other solutions. It is pretty easy, and you can qualify pretty easily. The biggest thing to remember if you are going to do this is that you cannot then use your card for regular spending because the goal would be to eventually pay the credit card off.
2. Home equity loans
If you feel like you are really drowning, one option would be to basically take a second mortgage out on your home. You’ll have to have enough equity in your home already for a mortgage company to consider it worth giving you a loan on the house, and you are basically offering your house up as collateral on your debt. The good thing, though, is that this will usually give you low monthly payments since it is spread out over a long time.
3. Personal loans
Getting a personal loan is one of the options most often used for people looking to consolidate debt because it is an unsecured loan, so it isn’t too risky, and it allows you to put all your debts into one monthly payment at one interest rate. The payments never change, and you can cut up your credit cards as soon as the loan has paid them off.
4. Pull from retirement
It is never a good idea to pull from your retirement unless it is a big emergency. If you are to the point where you need to pay off debt or you will lose it all, then you can do it, but otherwise, avoid it at all costs. There are usually fees associated with taking the cash out (including paying taxes on the income), and that money is supposed to be saved for your future. It is better to just forget you even have the extra money.
If you aren’t sure what to do, speaking with an expert will help you get a better idea of what will work best in your situation.
Source: http://www.bankrate.com/finance/debt/debt-consolidation-options-1.aspx
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