Reduce Your Debt With These 5 Tips

It's never pleasant to realize that you're in financial hot water, but pretending the situation doesn't exist is NEVER the way to deal with the problem. If you're having trouble meeting monthly payments, find yourself borrowing or using credit cards to meet daily expenses, or have one or more of your credit accounts turned over to a collection agency, it's time for you to get proactive and bring your debts back under control. Below you'll find five ways to reduce your debt. Some take time, all take some level of commitment and effort - but it's worth putting in the time to start cleaning up your debt situation.

1. Develop a budget - and stick to it.

The first step toward getting control of your finances is to realistically assess your situation. Sit down and draw up a budget that takes into account all your income and expenses. First, list all your income. Next, list each of your 'fixed expenses', the ones that don't vary from month to month. Those may include your rent or mortgage payment, your auto loan payment, and your utilities if you're on a budget plan to pay for them. Next, add in necessary expenses and payments on bills that vary from month to month. Finally, list all your daily and regular expenses for entertainment, transportation and the like. Your goal is to develop a budget that lets you meet all of your monthly fixed expenses, and figure out where you can cut expenses to start paying down your credit card and other debt.

2. Contact your creditors.

Communication is one of your best tools to help you through difficult financial times. Your creditors would really prefer NOT to take stronger measures to collect the money that you owe them. After all, it costs them more money to refer your debt out to a collection agency. As soon as you know that you're having trouble making ends meet, call your creditors and explain the situation. In most cases, they'll be happy to work out a modified payment plan that will make it easier for you to meet monthly expenses. It may mean extending the period of your loan, or renegotiating the terms of a loan agreement, but in the short run, it will take the heat off and in the long run, it will save your credit rating.

3. Pay down your highest interest loans.

Pick and choose among your credit card payments and loans. While it's generally not a good policy to pay only the minimum payment on credit cards and revolving loans and lines of credit, there is one exception. If you have one or two high interest outstanding loans, one of the better ways to get control of your debt is to eliminate them as quickly as possible. By meeting the minimum payments on other debts for a few months, you can concentrate on bringing the balance down on your most expensive loans.

4. Transfer your balances to lower interest loans and lines of credit.

If you have outstanding debt in high interest loans and credit cards, your finances can benefit from moving the balances to a lower interest credit card. Credit cards with 0% introductory rates for six to twelve months are widely available right now, as are low interest balance transfers. Take advantage of one to transfer a high interest loan and pay it down during the introductory period.

5. Get a debt consolidation loan.

A debt consolidation loan makes sense if you are paying on several different debts with varying interest rates. By taking out a home equity loan, second mortgage or other secured loan in the amount of your total debt, you can pay off all your other creditors, and have one monthly payment to deal with. By using a home equity loan to consolidate your debt, you take advantage of a longer payment term and lower interest rates to bring down your monthly payment and free up your resources for savings and other investments.

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk.

---

4 Simple Ways to Solve Your Debt Burden

Getting Behind Getting behind on your debts owed can be... Read More

Credit Card Debt Freedom is Possible

Credit card debt have you drowning financially? You're not alone.... Read More

Help to Get Out of Debt

Debt Help is the stepping stone to debt elimination and... Read More

Personal Debt Reduction Practices

Personal debt reduction practices, the steps people take to relieve... Read More

Stop Debt Collectors

Can you stop debt collectors ? . . .You better... Read More

Credit Counseling ? Signs That You May Need Help

Credit counseling is a viable option for those who are... Read More

What is Debt Settlement and How Does it Work?

Debt settlement involves negotiating with a creditor or creditors to... Read More

Debt Validation: Do you have to pay ?

It happens all the time. Debt collectors try to collect... Read More

Life on a Debt Management Program

Signing up for a debt management program is easy; it's... Read More

Credit And Debt Relief--A One Stop Solution

Amy Wright, 34, was extatic when her realtor showed her... Read More

Establish Money Saving Goals For Added Success

Having something tangible to strive towards can work wonders for... Read More

Your Ticket Out of Debt Relief

If you are in debt over your head and wondering... Read More

A Debt Elimination Process Must Be Initiated From You.

The first and maybe most important step in a debt... Read More

Save Money When Going Out

It seems as though whenever we go out for the... Read More

Turning Bad Debts into Good Debts through Investing Fundamentals

If you've ever earned enough money to put some aside,... Read More

Debt Getting You Down? - Make a List!

Debt is not much fun and when faced with it,... Read More

Debt Relief -- Why Most Programs Have A 75% Failure Rate

Debt consolidation, equity loans, credit counseling, debt management plans, even... Read More

Bankruptcy: What You Need to Know

Personal bankruptcy is a legal way to give people with... Read More

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

Debt

We all know about debt. If you don't have too... Read More

Individual Voluntary Arrangements- A New Alternative to Bankruptcy

This May, the Department of Trade and Industry in the... Read More

Secrets to Why Debt Reduction is So Vital for Your Financial Health

Living with debt is never a good idea if you... Read More

New Bankruptcy Law ? Five Essential Things to Know

Last April, Congress passed the Bankruptcy Abuse and Consumer Protection... Read More

The Five Most Popular Questions About Bankruptcy

WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law,... Read More

Debt Settlement

What is debt settlement?Debt Settlement is a process to settle... Read More

Life After Bankruptcy

Bankruptcy and Credit - What Happens After Your Debts Are... Read More

Bankruptcy: Which Chapter Do I File?

There is more than one kind of bankruptcy. You should... Read More

What is Debt Settlement?

Debt settlement is the process of negotiating with your creditors... Read More

You Can Make Financial Resolutions Anytime

The New Year often brings with it a desire to... Read More

How to Protect Yourself: Debt Collections

So you are getting collection calls? You're desk is full... Read More

Selecting A Credit Counselor; Asking The Right Questions.

When you find yourself thinking about using a credit counseling... Read More

Hide That Car! Fighting the Repo Man

Vehicle repossession may appear justified in circumstances where a person... Read More

Ten Ways to Get Out of Debt

1) Use your AssetsIf you have assets with some significant... Read More