Getting out of debt can be a long, complicated, and drawn-out process for many people. If you have spent years creating your financial problem, the solution to get out of trouble will not happen overnight. It can take months, or even years, to get out of debt. The good news is that it can be done. Even better news is that you have several options to help you get out of your financial debacle. Let’s take a look at the top four methods for getting out of debt.
- Credit Counseling
Credit counseling companies are not hurting for business. The main reason that they are so busy is because they can be a really good option for helping to get out of debt. The bad part is you will learn that many companies charge exorbitant fees or do a lot of work for you that you can do yourself for free. Your best bet is to work with a non-profit company or government agency. Some government agencies and non-profit firms provide credit counseling for little to no charge. By spending a little money each month you may be able to find a professional who can better help you navigate through your debt situation.
- Debt Consolidation Loan
Want to get out of debt faster? Replace your high interest credit card debt with one, lower interest rate loan. You could look into a 0% balance transfer to one of your credit cards. You could also see if a bank or credit union will give you a debt consolidation loan. Whatever method works better for you, do not pay for an application fee, EVER.
- Home Refinancing
Even with interest rates on the rise, refinancing your mortgage may make sense and allow for you to save hundreds of dollars per month versus paying each individual bill. With the money saved each month, you could use your savings to pay off your other debts.
- Cash Out Refinancing
Alternately to home refinancing, you may have enough equity in your home to do a “cash out” refinance and pay off your other debts. On a positive note, although credit card interest payments are not tax deductible, home equity loan interest payments are. Ultimately, you might be able to reduce your debt burdens, as well as reduce your tax obligation by cashing out.
As you can see, there are 4 really viable solutions to help you reduce your debt. Take the time to learn all you can about each of these options and select the plan that is right for you and your situation.