“Some debts are fun when you are acquiring them, but none is fun when you are about retiring them” – Ogden Nash. One major thing 86% of debtors around the world wish for is debt relief. It has been reported by the Federal Reserve Bank of New York that in the United States, the house-hold debt has now become its highest total ever – above $14 trillion. More than ever, the world obviously needs tried-and-true secrets to handling debts and how to get out of debt.
The number one question I hear debtors ask most times is, “how do I pay off my debt fast?” The question can’t really be answered without considering the factors around it. The secrets to handling debts is dependent on a variety of factors.
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Why don’t we go back a little bit and check what debt is, and also see the difference between the good and bad debt.
What Is Debt: Difference Between Good Debt And Bad Debt
Debt is an amount of money borrowed by one party (probably from an individual or an organization), with the aim of either increasing a net worth or purchasing an asset.
In the explanation I made above, I just touched the two kinds of debt, which are: the Good debt and the Bad debt. But let me properly explain their difference.
What Is Good Debt?
Good debt is actually said to be money borrowed for the aim of increasing someone’s net worth. In other words, good debt is actually there to help make sales and help you get out of debt. Here’s how to get a bank loan to your networth.
What Is Bad debt?
Bad debt is debt that is acquired to purchase depreciating assets like cars, houses, and lots more. Which contributes to having increased debts and decreasing net worth.
Now, there are some more terms you should understand, and I am going to explain some kind of debts listed below and how you can handle your debts fast.
- Secured vs Unsecured debts.
- Credit card loans.
- Medical bill debts.
- Student loan.
- Personal loan.
- Car loan.
- Business debts.
- Collection accounts.
So, let’s get started, and learn how you can handle your debts.
Secured vs Unsecured Debts
Secured debts are those loans that borrowers won’t be eligible to apply for if they do not have an asset to stake. The borrower has to put down an asset that can be resold to pay off the debt. For example, seizing a car dropped by a customer as collateral, because he couldn’t pay off his debts.
This kind of debt is just the exact opposite of secured debts. In this case, the borrower would not have to bring any collateral. It has no security, lenders must issue a lawsuit in order to make the borrower debt free. An example of an unsecured debt is the credit card loan.
This kind of debt would actually provide more chance for debtors to handle debt because the lender would have to issue a lawsuit based majorly on the promise that the buyer can repay, and his credit worthiness.
Credit Card Loan
Majority of Americans are struggling to pay off credit card loans most times caused by holidays. In most cases, the credit card debt is actually the hardest debt to pay. So many people die trying to pay off their credit card loans.
While several others get frustrated and depressed thinking about the different ways they can pay off their debts fast. You may also be here right now.
Here are different strategies for paying off your credit card loans in no time.
Set a goal
If you want out of your debt, then setting goals is a must. You have to set achievable goals to pay off your credit card loan.
There are two keys that you would need if you want to accomplish any goal set to pay off your credit card debt; self-discipline, and patience.
If you are going to pay your debts, you’ve got to exercise patience and discipline yourself. So the question is are you ready to handle your debt?
When applying these keys, try to monitor your progress, because that would also motivate you to pay off your credit card loan In no time.
Bury your credit card in the woods
Like I said before, if you are going to pay debts fast, you have to be disciplined, and one way to do that is to put your card in a safe lock. Let it stay away from you, also try to use cash instead of a card.
Reduce the way you spend
You see, reducing the way you spend actually helps you to gather more money, and checking the way you spend weekly is a way to make this happen. Check where your money goes monthly, and cut off the unnecessary ones.
Make use of the most popular trick to get out of your credit card loan.
Most Americans have realized the best way to pay off your credit card loan completely. The best way is to pay it in a smart way.
When all your fixed monthly debts are paid, make the lowest payments that are required in your credit card, with the minimum interest rate, and increase your payment on your credit card with the maximum rate.
After paying a debt, use the extra money to pay the credit card with the next maximum interest rate.
Medical Bill Debts
According to a 2016 Kaiser Family Foundation and New York Time survey, more than one in four Americans had trouble paying a recent medical bill.
Many things trigger the increment of medical bill debts; things like longer stay in the hospital, frequently visiting a medical provider, and lots more. Many of these things are inevitable which results in more medical bills piling up, and becomes very expensive to pay.
In 2017, the Consumer Financial Protection Bureau found out that the major common reason why people were contacted by debt collectors was medical bill debt.
The whole thing leaves a question; “how do I pay my medical bill debt?”
Here are a few ways you can pay off your medical bill debt fast with these secrets to handling debts.
- Payment plan
Lots of medical providers can actually make a payment plan for your bills. This actually helps to handle your medical bill debt, if you can’t pay all at once.
- Medical credit card
Most medical credit cards have an interest free time range of about 6 months to 1 year. So, if your medical provider doesn’t accept a payment plan, it may accept a medical credit card. Also try checking to see if you can pay off your medical bill debt within the interest free time range, so as not to pay interest that can increase your debt.
- Hiring a medical advocate
If you are actually facing lots of medical bills, probably due to the fact that you had an extended stay in the hospital, or any medical emergency, and you need to pay your medical bills as fast as possible, hiring a medical advocate would be a good way.
A medical advocate can actually negotiate on your behalf because they are experts in medical billing, who know and understand major costs for procedures and understand how to read health care bills.
A medical advocate can detect charging errors and reduce the amount you owe. When looking for a medical advocate to hire, try to hire the one you would be able to pay.
- Income-driven hardship plan
Just in case you are receiving a good income, and you have a high medical bill to pay, this might just be the best way for you to pay your medical bill debt strategically.
This method is just like the payment plan method. Using an income driven plan, you can actually divide the total amount you owe into a regular and more manageable payment.
In this case, you may also be able to reduce the amount you owe. Try to apply for Medicaid before you become eligible.
You can also find other ways to pay off your medical bill debt in no time.
Most times, 7 out of 10 college graduates leave school with student loans, trying to pay it off sometimes can really be a big deal.
“Some people spend their entire life trying to get out of student loan debt.- Yikes“.
Paying off student loans cannot be done overnight (sorry about that). But there are fast ways in which you can be free from student loans.
The most effective way is to pay more than minimum every month, because it’s when you pay more than the minimum amount monthly that the interest rate will reduce.
Here are secrets to handling debts from student loans faster.
- Try to make extra payment the correct way.
- If you have a good paying job, it would be good to Refinance.
- Enrolling for autopay is also an effective way to pay off your student loan debt.
- Another effective way to handle your student loan is to pay half of the monthly payment every two weeks (this is a good trick).
- Pay more than minimum balance.
Incurring personal loan by consolidation isn’t a bad thing. Most loan terms are generally about 2 to 5 years along with interest rates usually within the range of 5% to 36%.
In most cases, it is very important to pay on time in order not to increase the interest attached with the loan.
The question is “how can you pay your personal loan very fast?”
Worry less, cause you can actually do that by following the few tips below.
- Outline your debt according to your interest rate ( from the highest interest rate to the lowest interest rate).
- Try as much as possible to increase the amount you pay monthly.
- Also make payments on time, because late payments might actually incur more interest.
- Don’t forget to bury your credit card in the woods, like I said earlier.
Remember what I said about secured debts? Well, a car loan is a form of secured debt. It’s so nice seeing people gazing at your brand new four-wheeled automobile moving down the street, swaying pedestrians off their feet. Knowing fully well that you’ve not completed the payment of the car.
The question is how will you handle your car loan? Especially when it’s very expensive.
Now here’s a way to pay off your expensive car loan
- Divide your salary into two.
- Pay more than minimum monthly payment.
- Try paying your auto loan before it’s due.
- Simply refinance your loan.
- Make sure you are not paying more than you owe.
According to a 2013 study, the Federal Reserve found out that the total mortgage debt outstanding at the end of the third quarter of 2013, was more than $13 trillion.
Mortgage is also a form of secured debt and is one of the most expensive loans to incur.
Many people are actually facing problems paying their mortgage loan, well if you are one of them, you are in luck cause, I’m about to give you some secrets on how to pay off your mortgage loan in less than 10 years.
- First off, pay down other debts.
- Each time you pay your mortgage, try as much as possible to pay extra.
- Also use the biweekly payments method.
- Try to use your tax refund to make one larger payment annually.
- Refinance your mortgage.
If you are going to keep your business running, you might have to hire new employees, buy new machines, equipment, and lots more. How can you do all of these without enough cash?
Loan! Yeah that’s right. Loan is a very integral part of growing a business. But sometimes, this can lead to having lots of debts, if not well handled.
So, how can you handle your business debt if it’s getting out of hand.
- Negotiate with your lender to see if you can cut down the loan.
- Try to split your profit into two, and put one half into the business.
- Try to offer a new product, or service, and improve your marketing’s strategy.
- You can also consolidate your debt.
- Reduce the way you take away from your business.
One way to get the debt collectors off your back, when having much debts on collections that might feast on your credit is to pay them off.
But how can you go about that?
These are 5 fast ways to handle your debt collectors.
- Make sure you verify the debt is yours before you commence payment.
- Try to pay it off all at once.
- Settle for less.
- See your state’s statute of limitations.
- Start a payment plan.
You might also want to use the debt payoff calculator.
In conclusion, “If you don’t take good care of your credit, then your credit won’t take good care of you.”