Consumer debt is a taking a severe shape in the face of the global economy. In the US, near about every family carries $8000 credit card debt approximately on average. If you are in a similar situation then you can choose any one of the debt relief strategies given below:
1. Budgeting
You can avoid splurging by preparing a stringent budget plan to track your expenses. Budgeting helps you save considerable amount of money and guide you to use it for paying off your debts.
2. Debt Avalanche
Prepare a list of the debts in descending order of the interest rate for a debt elimination plan. Make payment on the high interest rate debts first and make only minimum payment on the remaining debts. Make sure you move to the next debt on the list after paying the debt top on the list. Try to continue doing so until you pay off the debts completely.
3. Debt snowball
In debt snowball method you are required to pay more on your smallest debt. But ensure that you make minimum payment on other debts. Diligently continue in this ways until you pay off your debts. It might encourage you to pay off your remaining debts effortlessly.
4. Interest rate arbitration
You can obtain a secured low interest loan to pay off your unsecured debts. You can effectively manage your debts with a single monthly payment as well as lower the interest rate.
5. Consumer Credit Counseling:
A certified credit counselor will review your financial and formulate a budget so that you can pay off your debts effortlessly. He will efficiently manage your financial situation.
6. Debt settlement Program
Debt settlement program is considered as one of the viable debt reduction strategies. The professional debt arbitrators negotiate with the creditors to lower the outstanding balance to make it affordable to pay off. In this program, you pay less than you actually owe to the creditors.
7. Consolidation Program
The financial experts of a debt consolidation company negotiate with the creditors to lower the interest rate on the principal balance. In this program, your high interest debt is consolidated in to single monthly low interest payment. A single monthly payment made to the consolidation company is disbursed among the creditors.
8. Consistently pay more than the minimum balance each month
Make sure that you try to pay more than the minimum balance otherwise you will not be able to lower the outstanding balance.
9. Balance transfer
Make use of the teaser or introductory rate offer on the credit card to pay off your debts. Transfer your high interest balance to a zero interest card but pay off your debts within the span of this introductory offer.
10. File Bankruptcy—the Last Resort
Bankruptcy should be the last resort to eliminate your debts. Filing under chapter 7 and 13 helps to discharge your debt but it blemishes your credit report for 7 to 10 years.
Therefore, these are the debt repayment strategies that you can employ to eliminate your financial woes. Make sure you exercise financial discipline so that you do not incur debt in future.