How to pay off credit card and high interest debts
With the cost of living going up, mortgages, bills, and credit card charges can easily pile up. Many Canadians now find their cash flow tightening as they juggle their debts. When this happens, people look to solutions that will immediately release them from the pressure of repaying.
Though there are ways to be free of financial obligations instantly, investing the time and effort to find a prudent solution is far more rewarding than looking for quick fixes.
Strategies to eliminate debt
Paying off all your charges within a year is an excellent goal, but also make sure that it’s feasible for your specific financial situation. Even if you can only manage to pay a portion of your credit card debt within the next twelve months, that’s an accomplishment. You have multiple strategies available to help you achieve your goals of overcoming debt, such as meeting more than the minimum payments. Here are a few strategies to free yourself of the burdens of it.
Pay the smallest balance first
Without making any major changes to your finances, like taking out a loan or changing jobs, one thing you can easily do is to pay the lowest balance first. This is called the snowball method, in which you pay off the lowest balance; any funds leftover from paying off the smallest debt is put towards the next largest amount due (Wells Fargo, 2020).
Through this process, you may be able to pay off everything within a year, depending on how much you owe in total. It’s also a great motivator to help you reach your goals; each time you have fully paid off a balance, it’ll be a weight off your shoulders and you should treat it as a victory.
Negotiate with banks and creditors
Interest rates that are prescribed by financial institutions are where a large portion of your payments go. When you renegotiate the terms of the original agreement, you have the opportunity to change the interest rate and the term length. This is a great option if you’re keeping up with your financial responsibilities and seeing a rise in your credit score.
Another possible outcome of speaking with banks is that they may be able to offer a personal loan. With the financial institutions’ strict application process, it’s often a challenge to obtain such a loan and could come with equally high interest rates, depending on your credit score. Regardless, it’s worth speaking with financial experts who can provide more insight on how to pay off credit card debt and simultaneously raise your credit score.
Find ways to earn more
Many people pick up a weekend job or create a side-hustle on top of their regular work. The income you make from the extra job can be used strictly for paying back the amount due on your debts. Likewise, you could do it the other way around. The extra income becomes your flex money for personal spending, while the income from your main job takes care of bills, loans, and other responsibilities.
Setting aside more money to repay your financial obligations will allow you to become more quickly eliminate debt. You may be able to completely pay back what is owed within a year. If your combined income streams accommodate for it, your debt will decrease significantly within the time frame that you set for yourself.
Consolidate your credit card debt
A common and effective solution to managing outstanding balances quickly is through debt consolidation. Both banks and alternative lenders can offer this form of debt management. They will give you a lump sum of money that you can use to repay all your outstanding bills, leaving you with only one monthly payment to reimburse over a set term.
For example, if someone has $50,000 of debt from multiple creditors, and they are paying a significant portion towards interest. This could make monthly payments total approximately $1500 a month. However, a lender could give the borrower the funds to satisfy the total amount due, while offering a lower interest rate, which could bring the monthly obligation down to $500.
Concerning speed and time, a credit card debt consolidation is both a quick solution and a long-term commitment. The initial sum of money that you’ll receive will be sufficient to cover all the areas where a balance is due. Naturally, your monthly payments will become lower, so if you feel that you can satisfy the amount owing within the year, then that is a wonderful position to put yourself in.
Through any of the above strategies, you can eliminate your outstanding balances within a year or less. Even so, it’s important to critically analyze what you can do to pay down money owed quickly. Be balanced by staying within your means but also leave yourself enough room to enjoy life.
Debt consolidation for credit cards with home equity
While there are many ways to condense your outstanding payments, utilizing your home equity is one of the strategic ways to carry it out. Even more so, getting a loan from Alpine Credits will open doors for you to gain financial freedom. Some of the benefits that Alpine Credits offers are:
No impact on credit score
We believe that your credit rating or income should not affect your ability to receive a loan. Whether you have a good credit score or a bad credit score, home equity loans are accessible to you. The only factor that we take into consideration is your home equity value and your remaining mortgage balance. As long as you have paid at least 25% of the mortgage balance, you are likely to see a quick approval.
Comparably lower interest rates
Because our loans are based on your home equity and not on your credit rating, Alpine Credits offers lower interest rates. This makes your monthly payment lower in comparison to what you would be paying to multiple high interest creditors.
Quick approval process
Because Alpine Credits has a simple approval process, we can offer an approval within hours of receiving your application and strive to deliver same day approvals. Conversely, traditional financial institutions review applications, require lots of documentation and have lots of questions which takes more time and can leave applicants feeling stressed; and there is no guarantee of approval after the lengthy application process.
Credit card debts with Alpine Credits
Would you like to learn more? Please contact one of our financial solution specialists today. They can answer your questions about using your home equity for debt consolidation. The call is obligation free, and you can reach them at any time by phone number or email.