How To Get Out Of Debt Faster And Easier
With the average American owing more than $10
,000 in credit card debt, more borrowers than ever are taking advantage of services that promote debt relief by making one payment per month. This is made possible by services like debt consolidation and debt settlement.
One of the best reasons to seek debt settlement or debt consolidation is to lower your monthly payments. If done properly, this will provide your family with more disposable income that can be invested. Depending on how much debt you owe and how many creditors you are paying, money can be freed up to help your family save for retirement, your childrens education, and turn your liabilities into assets.
For example, if you have three monthly payments of $70, $60, and $90 total you have $220 going out towards your credit cards every month. By using debt consolidation youll have a personal loan with a lower interest rate that pays off all the creditors. The new monthly about will be lower than $220, freeing up money that can be used to pay down the debt faster. If the personal loan covers a vehicle debt, you could come into full ownership of your car faster.
If your credit card interest rate is higher than 10 percent, missing a payment can result in a higher interest rate that could cost you a lot of money in the long run. The more payments you are making per month, the higher the risk of forgetting to pay a bill or running out of money beforehand. Knowing how to get out of debt by placing all those payments onto a single note is important. Debt consolidation and debt settlement are two ways to do just that.
The money saved on interest each month can be placed in an emergency fund. Most third party financial authors recommend building a savings account for emergencies that totals at least three months worth of your income. Not only will this type of account earn you money over time, the funds there will prevent you getting into worse debt in the event of a financial crisis.
The savings could also allow you to become more aggressive with retirement funds. In a 401K earning 10 percent of interest on average over time, an investment of $25 per month for 30 years could earn you an additional $54,283 for retirement. If you are thinking of using the savings that come from debt settlement or consolidation for your childrens education, time is the biggest factor. The faster you can save, the more years the money will have to mature before your child reaches college age. If you start saving $300 a month, by the time your child is 2-years-old an account that yields 10 percent over time would yield an additional $11,800 for college.
Greenshield Financial Services is a Financial Health Management Company that specializes in a debt settlement program as alternatives to debt relief, debt help, and bankruptcy to help you learn how to get out of debt.
by: Brian Reed
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