All of us have from time to time gotten over our heads financially. It is often for a good reason such as when a family member is hospitalized or a child begins college. But the reasons don’t matter to our bank that holds our credit card. That debt can suddenly balloon up and out of control as the interest rates on our card compound the problem.
Once this happens, how do we get out of debt? For most American families, holding some debt besides the mortgage is a given. But if it has gotten to the point where it is keeping you up late at night worrying, it is time to take matters into your own hands. You can resolve it and without going to bankruptcy court. Here are a few things to consider as you look at ways to diminish this debt to make it again something you can manage.
Double Up Your Payments
Simply making a minimum payment each month will never get you out of debt, but making two of them each month can be a big help. If you can’t secure a loan from a peer-to-peer network or negotiate a lower interest rate, then this might not be a bad second choice.
The idea is to make that second payment mid-month as it will then be applied directly to the principle because it is in the middle of the payment cycle. It is important to remember to make that second payment so mark it on your calendar or any other way you can help make sure you remember to do it.
Talk to Your Bank
If you have multiple cards you might want to talk to the bank that holds your highest interest rate card and see if you can get them to negotiate a lower interest rate. Some banks are quite helpful with this and will simply move your debt from the higher interest rate to a smaller one. Know that if you do this you will probably only be getting that lower rate for a set amount of time, so concentrate on paying off this card first.
Peer to Peer Lending
Unless you have an uncle with unlimited wealth from the creation of a best-selling software suite like Microsoft Dynamics 365 or something similar, your best bet to find a loan is through one of these new financial networks. You can go online to places such as LendingClub or Prosper to negotiate a loan that will allow you to consolidate your debt into one manageable amount.
You will need a steady job and good credit rating to qualify, but their rates are well below what credit cards offer. This is what makes them such a good option for anyone who is just recently seeing that debt build up.
It Can Be Done
The bottom line on all of this, from moving credit to lower cards to negotiating rates or borrowing to pay them off is that it can be done. If you have always been a good credit risk until now and this is a temporary bump in the road, you can get out of debt.
Don’t put it off until your credit rating is trashed or you won’t be in such a good place for negotiations. You aren’t alone, thousands are thinking of the same problem right now. The difference is, you are looking for solutions. Consider all of them and find the one that works for you.