Helpful Ways to Reduce or Eliminate Debt
It doesn’t matter how much you make – or don’t make – eliminating debt is at the top of most people’s minds in today’s economy.
Let’s face it, a lot of people need to borrow money from time to time. There’s no shame in having debt (even a lot of it) if you take steps to pay off what you borrow in a responsible way.
Tips to Reduce Credit Card Debt
As you may know, not all debt is the same, and everyone’s situation is unique. So, let’s talk about how to reduce credit card debt specifically.
First, take advantage of 0% interest offers to help consolidate debt and avoid high interest on your old credit cards. Some offers have time limits, but if you pay off the consolidated balance before the offer ends, you can avoid paying interest altogether.
If you do not qualify for a 0% interest offer, then you should overpay as much as possible on every monthly payment. This will reduce the interest you pay over the life of your loan, which can result in hundreds of dollars or more in savings, reduce your minimum monthly payments, and shorten the length of repayment.
How to Reduce Medical Debt
Medical debt can be a huge burden for many people. It can create stress and pressure that feels never-ending. Fortunately, there are several ways to reduce medical debt and get back on your feet financially.
First, if you feel like you’re about to fall behind on payments, don’t wait to contact the billing office handling your debt. They are familiar with the burdens people face and may have programs to help reduce what you owe, allow you to make lower payments, or both. Just make sure you contact them BEFORE you fall behind to help avoid creditor or legal issues.
Don’t forget that oftentimes there are financial assistance programs that can help cover inpatient hospital stays and emergency room visits. Some hospitals will even help you with more flexible payment plans.
For more information on this topic, take a look at this helpful blog article that is fully devoted to the topic of reducing medical debt.
How to Negotiate with Creditors to Reduce Your Debt
Another method often overlooked by borrowers is negotiating with creditors to reduce the debt you owe. Many creditors would rather negotiate a lower amount owed or lower monthly payments than have you miss payments or pay creditors to contact you with legal demands.
If you are overwhelmed with debt, here are five helpful tips to negotiate with creditors:
- Find out if debt negotiation is right for you. Having your debt reduced can sometimes have a negative impact on your credit score, making future borrowing for a home or car more difficult. So, determine if you are truly in a position where this is necessary.
- Know what terms will work for you. Before you sign anything, make sure you can pay off your reduced debt on the terms you agree to. Sit down and look at your budget, and honestly ask yourself what you can afford to pay.
- Learn your rights. Many borrowers don’t realize they have rights under the Fair Debt Collection Practices Act. This is a must-read before entering negotiations with creditors. By knowing your rights, you can discuss your situation more confidently.
- Prepare for the call. Before you pick up the phone, write out the details of your situation and what questions you want to ask. Keep your focus on what is keeping you from making payments, as well as what you can afford to pay. Also, take good notes so you don’t forget any important details.
- Stay positive and commit to change. While you negotiate a reduced amount, remember to stay positive. The person you are negotiating with is human, just like you, and their job is to reach a solution that works for you and the creditor. Once you reach an agreement, make a commitment to pay off your debt and practice responsible spending and savings habits going forward.
Where to Find Loans to Get Rid of Old Debt
While we know it’s important to reduce your debt, we also understand that sometimes you just need a loan to help with an unexpected situation.
At LendNation, we offer a variety of short-term loans to help you get through the stress of an unexpected expense. No matter what your debt situation is, LendNation can help you determine if one of our loan options is right for you.
If you want to learn more about debt reduction tips and strategies, check out our library of helpful resources.