Different ways to pay off debt include organizing a realistic plan that tracks income and expenses, meticulously keeping up with payments, and refinancing to obtain lower interest rates, reports MarketWatch. Some experts recommend paying off loans with higher interest rates first. Alternatively, tackling smaller debts first can help sustain motivation, points out Psychology Today.Continue Reading
Although paying off debt requires discipline and self-sacrifice, consumers should be realistic about their capabilities and allow themselves spending rewards along the way, explains MarketWatch. They should keep lists of their income, expenses and prioritized financial goals. They may focus on eliminating one debt at a time, but they should keep up with ongoing loan and credit card payments to avoid burgeoning interest rates and obtain more leverage in interest-reducing negotiations. Some student loan borrowers in government, nonprofit and public service jobs may be eligible for forgiveness of these loans under the Public Service Loan Forgiveness Program.
Some consumers pay off debts by consolidating them through a home equity loan refinancing at a lower interest rate, according to MarketWatch. They should do this only if they are confident that they can manage the payments, as they risk losing their home if they default. Nonprofit debt management organizations may also be useful in helping consumers to pay off debt.Learn more about Household Budgets