Debt can affect us in a variety of ways. Many in debt suffer from intense bouts of stress as they fight to stay afloat, but you don’t have to feel extreme stress as bills begin to pile up. In fact, there are a number of very effective ways to minimize your debt with little hassle along the way.
Here are a few things to consider if you’re facing a significant debt.
1. Don’t let yourself use denial as a strategy
The first and most important thing to remember about debt is that it only gets worse if you allow it to control you. Denial is one of the first things many in debt resort to in order to try to battle the stress related to increasing bills and financial obligations. This will only makes the problem get worse faster. Rather than trying to run away from your problem, you need to face it head on. Interest collects at a rapid pace if you don’t come up with strategies to defeat it, so denial only magnifies the problem.
2. Consider a consolidation loan
Approaching hard money lenders Oregon is a potentially powerful way to manage debts. Many in the hole find that one of the biggest challenges to paying off debt is that it exists in multiple places and at varying rate of interest. Consolidating these debts under one lender means that you only need to pay one monthly payment instead of multiple payments at different times of the month. It also means that you can eliminate higher interest debt like that of credit cards by simply taking out the cash loan and paying down your highest interest debt first. This simply transfers it to a more attractive lender who you can pay at a better rate every month.
3. Try to pay above the minimum
Paying above the minimum payment is an essential measure for eliminating debts. The minimum is set so that the lender can continue to maximize the interest charged to you every month. If you are serious about reducing your overall burden then you need to get ahead on your payments. Even a $50 overpayment every month goes a long way to eliminating interest building balances in rapid time. Get serious about repayment and start slashing the balances.
4. Consider investments to make up the extra
One question that all indebted individuals face is whether to save or pay off debt first. The answer is complicated and depends on your personal situation, but high interest savings can be a great way to build up capital while paying off debt at the same time. High yield investments like the ones offered by Yieldstreet can help you offset the interest from your credit cards and personal loans while making you money in the long term.
Many ask is Yieldstreet legit — can it really help me pay down my interest? The answer is simple. Any investment that nets a higher margin than your negative interest rate is worth piling capital into as you pay down your borrowed cash. If you owe on a loan that charges 6% and make 8% on your investment portfolio, then one option is to simply draw out the minimum required payment each month from your capital to pay the debt. The more cash you can place in a high yielding investment (one that makes more than your financial drain costs) the better off you will be in the long run. This is a highly risky strategy though. Your negative interest is not going away, but the viability of your investment might.
5. Add additional work opportunities
Taking on a side hustle or second job is a great way to eat away at debt. Adding work to your schedule is certainly not the best way to have fun with your free time, but your wallet will thank you when that second paycheck goes straight to paying down loan balances.
Debt is a difficult thing to deal with, but attacking it with a clear head is essential to getting rid of it for good.
