Paying Off Debt
 Easy Ways to Pay off Your Debt

OK, You know it's time to stop fooling yourself and start paying off debt! You are ready to tackle it, and put a plan in place.

But how to you go about doing that? Below and on the previous pages, you will find some great tips for paying off your debt.

To jump to a section that interests you - Click here for a summary of the ways to pay off your debt (right hand side of this page - Otherwise scroll down to see all of the ideas.

Borrow From a Family Member or Friend

Now this is a risky way to pay off your debt. And I don't recommend it unless you have someone that is willing to pay off your debt for you and doesn't expect the money back. That doesn't mean that you don't pay it back, it just means that they don't expect it to be paid back. Borrowing money from friends or family is always a tough thing to do and I have seen it ruin relationships.

With that said, if you do borrow from family or friends, make sure that that you document everything. Create it as a business transaction.  Make sure each party knows the interest rates and repayment terms and they should be laid out in a contract. Take the emotion out of it and it may work. (It's also a cheap way to get out of debt as they will usually charge you less interest!)
 

Consolidate Your Debt

Another way in paying debt down, is to consolidate your debt into one lower interest rate loan. Many banks will do this for you. CUT UP YOUR CREDIT CARDS if you do this. This way of paying off debt pays off your credit cards and many people fall into the trap of using them again. If you run up those cards then you now have a loan totaling what you owed, TIMES 2, as you will owe the same amount on your credit cards again.

Use Your Savings to Pay Down Debt

If you have savings that make a lower return then the interest you are paying on your debt, use your savings to pay down your debt. For example, if you are earning 4% on your savings of $10,000 and you owe $12,000 at an average interest rate of 22%, then you are earning a negative interest rate of 18%.  It makes more sense to pay down your debt and avoid the 22% interest, then earn the 4% interest.

Have an Idea to Share for Paying Off Debt

Know any other ways for paying debt off? We would love to hear them!

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