Solving the Puzzle of
Paying Off Your Debt
Previous-
Six Smart Ways to Pay it Off
Sure, we all want to get out of debt. But once you've made that decision, and have unlocked a source of cash (big hurdles, to be sure), there is a question of just what is the best way to pay it off? That, depends on your goals.
Whether you are afraid of losing your home, are closing in on retirement or want to get a big loan in the near future, WalletPop shares 6 common reasons people want to reduce their debt load and the best strategy for each.
· Paying Down Debt Overview
Next: The Round Robin Plan -
The Round Robin Plan:
Big Loan in Your Future?Thinking about buying a home, but you need to improve your credit score in order to get the best interest rate?
Paying down debt using the round robin strategy can get you there the fastest. People with the best credit score only use 10% to 20% of their available credit, so the faster you can pay down your debt on each card, the better your credit score will be.
· Learn Details of Round Robin Strategy
Next: The Snowball Effect -
The Snowball Effect:
Escaping High InterestTo use this strategy you start by paying the minimum amount on all but your highest interest credit card. Then use every extra cent you can find to pay the greatest amount you can on your highest interest credit card.
When you get that card paid off then continue paying the minimum amount you were paying on your second highest credit card plus the larger amount you were paying on the highest interest credit card.
· Learn Details of Snowball Strategy
Next: Win Back Friends & Family -
Personal Loan Unpaid?
Win Back Friends & FamilyAre you known as the family deadbeat? You can achieve redemption and win back the trust of your family and friends by following these simple steps. First, acknowledge your debt to your debtor. Second, calculate a realistic monthly payment and then treat this debt like any other bill. Pay it religiously. Third, pay interest not only in cash, but in meaningful gifts and actions.
· More on Paying Down Personal Loans
Next: Save Your House -
Minimize a Mortgage Mess
Whatever the reason, when you know you no longer can afford your mortgage payments, don't go hide in the closet. The first thing you should do is call your mortgage servicer and let them know you have a problem and what the problem is. Many loan servicers will tell you they can't do anything for you until you miss at least two payments or are more than 60 days late. If you can't get help from your mortgage servicer, don't give up seeking help and don't wait until you've missed two payments. Start working on finding a solution as soon as possible. Four Assistance Options
Next: Retire With a Clean Slate -
Retire With a Clean Slate
Still have debt and nearing retirement? You may want to reduce monthly savings to your retirement accounts, such as your 401(k), and instead use that extra cash to pay down your debt more quickly. But, be sure to at least put enough into your employer retirement savings plan to get your full employer match. You don't want to give up the extra money! Check with your financial advisor before taking this step.
· More Near-Retirement Strategies
Next: Wise Windfall Moves -
Wise Windfall Moves
In story after story about lottery winners, the first thing they want to do is pay off their loans. Not so fast.
Go ahead and pay off a big chunk of it, but this is also your opportunity to invest for your future, start saving for retirement, or simply create the emergency fund you never had and always wished you did. A cash cushion is great financial security as the economy heads into a possible recession. More Windfall Moves
More on AOL: Insurance to Avoid -
More on AOL:
Insurance to AvoidWhen it comes to insurance, people often think that it's better to be safe than sorry, but often wind up spending more money than they should on coverage they don't need.
Click through our gallery to see 10 of the more common types of insurance that experts believe are a waste of money for most people.
Do you own one of these policies?
Gallery: 10 Policies to Avoid
Next: More on AOL -
AOL Editor's Pick:
13 Most Missed Deductions
Don't overpay your taxes by overlooking one of the moneysavers we're about to share. Here's a baker's dozen of the most overlooked tax deductions.
Most Overlooked Tax DeductionsMore in Money & Finance
CREDIT & DEBT
PERSONAL FINANCE
Recent Comments
Gdo411 07:03:50 AM Aug 06 2008
wink, just keep doing how you're doing. it will be all right.
Gaylemarvin 11:23:39 AM Jul 02 2008
Affording college tuition is a thing of the past, at least for me. I am a college senior and I am not sure how I will be able to pay for that. I have set up a website www.marvingayle.com where someone can donate to assist me a little. Not to mention the fact that I am sick with an enlarged heart and from a single parent family.
jedikevin20 11:18:47 PM Jun 30 2008
lol. exxon/ gas companies or not at fault when it comes to this gas crunch. Don't get mad at the gas companies for continuing to make there money as our nation continues to buy and use tons of gasoline. We allowed this to happen. We began importing after the chaos of the 70's and for 30 years just relied on it to satisfy our needs. During that time, oil became globalized such that any oil we even get out the ground goes into a worldwide pool. We sat back and enjoyed with gas guzzling vehicles for decades. People state that we need to go drill in alaska or more offshore but even if we did OPEC would jsut undercut the supply and bam we back to where we started. Now were screwed as gas goes up. Unlike most nations our size is killing us. We have no real train service, no real other source of transportation but to drive. We have tons of half ideas on alternative oil sources but offcourse we don't come together and go with one but instead try to do 9. There is no end in sight. Oh and what
IMALONESKYWALKER 06:01:55 PM Jun 20 2008
Gee, I am so sorry for all you poor people. The brutal truth is often reality. America is in a state of shock right now. Rising prices for everything, credit card debt, morgage forclosures, no health care, rediculous medicine cost. corporate fraud, Junior cant go to college. What we need to do is buy more from China to make us feel better and use more oil. As americans, we have borrowed from the future and now it is here. OOPs.
LORILDARLING 10:47:27 AM May 15 2008
Yes I agree our government has gone to the dogs. We as Americans contribute. How many companies hire illegals, instead of Americans? How many Americans sit on their butts instead of taking that $7.00 an hour job? Therefore the companies are forced to hire illegals. It is sad I raised 4 kids no help from dad, working a $7.00 an hour job. Didnt have much. I did have a job. Until we all pull together it will decline. Everybody stop buying gas in the state of Texas for one day the gas company (Exxon) wouldnt be bragging about the billion dollar quarterly profits. They would complain about their loses, just like we complain everytime we fill-up our cars and trucks. AMERICA IT IS TIME TO DO SOMETHING.
StarTaraBlue 01:12:35 AM May 13 2008
EVERYTHING THATS HAPPENING WAS PLANNED YEARS AGO BY THE ROCKEFELLERS AND THE ROTHCHILDS BILL CLINTON IS KIN TO THEM, THEY ARE ALL MEMBERS OF THE CFR.
THE ONLY WAY WE CAN GET OUT OF ALL THIS MESS IS TO VOTE FOR RON PAUL OR BOB BAR, ALL OF US HAVE TO STAND TOGETHER AND VOTE ONE OF THESE MEN INTO THE WHITE HOUSE, THEY ARE THE ONLY TWO UPHOLDING THE CONSTITUTION, BUSH WANTS TO BURN IT .
Nays3000gt 10:08:32 PM May 12 2008
I am suprised no one has mentioned anything about tuition rates! If I was not graduating college in a semester I would have been dropped out by now...It is not easy paying for college on your own with the economy the way it is.
Nays3000gt 10:06:36 PM May 12 2008
Mr. President says, "I have not noticed a difference in gas prices..."
That says it all!
