Debt Management

Debt Management

 

Warning Signs of Too Much Debt

  • Unable to save 10% or more of gross income
  • Habitually paying only the minimum monthly payments on your credit cards
  • Borrowing from one lender to pay another
  • Asking a friend or relative to co-sign a loan because your credit record is weak
  • Unable to figure out the amount you owe
  • Would be in an immediate financial trouble if you lost your job tomorrow

 

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How to Conquer Debt

With the snowball method of paying off debt, you apply the majority of your available money for debt repayment to one loan and minimum payments on the others. After the first loan is paid off, you tackle the next loan and so on until all you’re out of debt completely (debt reduction calculator link).

  • Stop borrowing
  • Start using a debit card
  • Prioritize your debt repayment
  • Seek lower rates
  • Determine the maximum you can pay
  • Repay highest cost debt first
  • Continue paying the maximum

 

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With the snowball method of paying off debt, you apply the majority of your available money for debt repayment to one loan and minimum payments on the others. After the first loan is paid off, you tackle the next loan and so on until all you’re out of debt completely (debt reduction calculator link).

  • Stop borrowing
  • Start using a debit card
  • Prioritize your debt repayment
  • Seek lower rates
  • Determine the maximum you can pay
  • Repay highest cost debt first
  • Continue paying the maximum

 

Using Home Mortgages Wisely

  • Determine whether buying is appropriate
  • Choose the right type of mortgage
  • Decide if you should refinance
  • Decide whether to prepay mortgage principal

 

Your mortgage is most likely the biggest loan you’ll ever take and some of us are quite eager to get rid of it as soon as possible. An early payoff gives you peace of mind and financial freedom, but the low profit rate makes more sense to invest your money instead of paying off that debt early.

 

Click here to use the debt management calculator and determine if debt consolidation is right for you.