Finance Tips and Notes

To reduce your debt two things are needed self discipline and good financial planning. Below are ten ways that can help you with debt reduction:

1. Home Equity Loan: Homeowners have a great asset that can be used to reduce their debt. If you are a homeowner who has equity in your home, you can use that equity to obtain a line of credit, get a home equity loan or simply refinance your current mortgage. The equity you pull out of your house will help you pay off your debt. This has to be considered carefully because missed payments could result in the loss of your home

2. Replace high interest credit cards: Scout the market to locate the credit card company that offers lowest interest rates. Transfer your card balance to this company. This will reduce your interest repayments substantially. You should also look out for balance transfers at 0% interest. But remember that this gets negated if you skip or delay payment. One miss and you are back to paying the usual interest!

3. Utilize your assets: If you have any valuable assets, an extra car or valuable jewelry, that you can live without, consider selling these and using the cash to pay off some of your debt. Remember to start with your largest debt. These are usually the most challenging to get control of.

4. Get a personal debt consolidation loan: If you have a good credit score and reasonable income you should have little trouble in getting a debt consolidation loan through your bank or credit union. Credit unions offer lower interest while banks have their own individual lending criteria. Sometimes you may even have to put up collateral for such a loan.

5. Refinance your mortgage to reduce your payments: If you do not own a home you can try to apply for an income loan with a relatively ow interest rate. Lower mortgage payments will free up cash to help pay your debts.

6. Curb spending instincts: Stop spending on things you do not need. Most important, do not use your credit cards to make impulse purchases. Practice restraint and you could be on your way to a better life!

7. Use extra money wisely: If you come across unexpected money, such as gifts or refunds, use it wisely. Put it toward your outstanding debt.

8. Pull cash from low interest savings accounts: The amount of interest you are gaining on those low interest savings accounts is probably far less than what you are spending in interest on your debt. It is better to take that money and pay off your debt.

9. Find an extra source of income: Find a second job that earns you a bit more without eating into your time. Every little bit that goes into paying off your debts can make a huge difference.

10. Use a debit card: This way you can spend only as much as you have.

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