Paying off Debt in 9 Steps pt 2
Part two in the series on paying off debt: Throwing away your bills and shredding your credit card payment reminders simply is not going to make the problem go away. Debt is going to hover over you until you find a way to deal with it. Interest will continue to compound, and payments will continue to climb until you are in debt up to your eyeballs with no apparent way out. Luckily there is a solution - These 9 steps will have you paying debt off in no time.
3 - Now you are going to want to cash your savings account out. Use the proceeds from your savings and your investments in order to put them toward the repayment of your debt. No one really wants to do that, but it is a good idea if you have debt. Once you get out of debt you can work on rebuilding your savings as well as your investment portfolio. When you pay off your debt this way, it happens much quicker than if you try to simply budget for eventual debt repayment.
4 - Borrow money against your insurance. If you have life insurance that has a cash value attached to it, then something that you can do is to borrow against that policy. You are essentially just borrowing your own money in this way. The interest rate tends to be below what commercial rates are at, and so you can generally take your time when it comes to repaying that loan. It is important that you do eventually pay it back, though. If you should happen to die before the debt is repaid, then the outstanding balance with additional interest is going to be deducted out of the policy's face value meaning that your beneficiaries will receive less money than was originally anticipated. If you make sure to repay the debt back before you die, then this really is a small price to pay for the sake of getting out of your debt problem.
5 - Finagle money out of your family and your friends. You may be able to get a loan floated by someone in your life. Think about who knows you and trusts you - These people trust you more than a lender will. Unless you happen to be a black sheep, the chances are you will get a pretty decent interest rate from your family or friends as well. They may even be extremely tolerant of a late payment. If you want to maintain this relationship then you are definitely going to want to pay the debt back. If you know someone that can help you out in this way, it's a good way to go - But you really need to make sure that you pay the debt back because you do not want to end up losing a friend or a loved one over money and debt issues.
Photo Credits: Iain Farrell
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Categories: Uncategorized Tags: Beneficiaries, Budget, Credit Card Payment, Debt Problem, Debt Repayment, Eyeballs, Face Value, Insurance, Interest Rate, Investment Portfolio, Investments, Life Insurance, Paying Off Debt, Proceeds, Reminders, Sake, Time 3