How to get rid of debt

There are a few ways to eliminate debt but these will depend on the individual's debt circumstances. This article looks at a few of the common ways that can help to get rid of debt quickly.

Reduce existing debts quickly

Clearing off debts such as credit cards and loans can take time but there are a few ways to help clear these debts quickly. One of the main ways to get out of debt quickly is to always repay more than the minimum monthly payments. Increased monthly payments will mean the actual debt will decrease quicker; minimum payments are designed to keep customers in debt by only clearing interest fees. Another quick debt reduction method is to always pay as much as possible to high interest debts. High interest debts will mean more money spent on interest fees and this is simply wasted money. Always try to clear higher interest debts first and then concentrate on the less costly low interest credit cards and loans.

Transfer debts to eliminate them

One way of decreasing debt quickly without paying interest fees is to transfer all debts to a zero interest credit card. There are lenders who supply zero interest credit cards with long term introductory offers. This means customers can transfer existing debts from credit cards and loans to the zero interest credit card using a balance transfer. The customer then has the interest free credit period in which to clear off the debt without incurring any interest. Some lenders will provide long term zero interest introductory offers; this can be as much as eighteen months. This would be an eighteen month breathing space where debts can be repaid without any interest fees to pay. Debts can be repaid quicker as the money that would have previously been spent on repaying interest fees can now be used to clear the actual debt.

Use a debt solution

Debt solutions can help with debt elimination but there are eligibility requirements that must be fulfilled. Bankruptcy is a common debt solution that means debtors can wipe off their debts after one year if they meet the eligibility requirements. An Individual Voluntary Arrangement is another debt solution that can clear debts in around three to five years if creditors agree to the proposal. Contacting a debt counsellor to assess the debt situation will be the first step towards setting up a bankruptcy or individual voluntary arrangement. A debt counsellor should be able to find the right debt solution depending on how much the debt is and the type of debt involved.