Monthly indebtednes pays can become overwhelming at times. Currently, US households have over $13 trillion in debt, which includes$ 4 trillion in non-mortgage consumer loans. That means most people are trying to keep afloat and manage their monthly cash flow with large indebtednes pays hanging over their heads. There is a illuminated at the end of the tunnel, however. There are creative ways to lower your monthly pays. Most are simple to do and can instantly generate more breathing room in your monthly budget.
1. Negotiate a Lower Rate
The easiest thing you can do is to call your credit card company and ask them to lower your rates. You may be surprised at how often this works. This especially runs if you tell them you’re going to move their indebtednes to another institution. Remember, these credit card companies are making money off of your interest and fees. If you move your indebtednes, they don’t get those extras anymore. They’d rather have 15% of something than 20% of nothing, so take advantage of that and negotiate a better rate.
2. Get a New Credit Card
If that doesn’t work, simply move your debt to another charge card. There are credit card offers galore out there, and many of them offer low fees for transferring your balance from another charge card. Many also offer 0% or at least low interest for the first year as an introductory offer. When the low introductory rate is about to end, simply sign up for another credit card and move your balance again. Ideally, you should be paying down your balance, but this strategy buys you some time and can save you hundreds and perhaps thousands of dollars in fees and interest over day.
Worth noting however, is the presence of annual fees. Many cards which are lower in interest may charge an annual fee. By acquiring new cards, these annual fees themselves may grow out of hand, so be sure to read the fine print before applying for a new card.
3. Move Debt to a Personal Loan
Instead of moving your balance to another charge card that will eventually charge you high-interest rates and fees, you should look into get a personal loan from your local bank. Many local and regional banks, especially credit unions, offer lower rates for personal loans. And if you tell them you’re going to use it to pay off a high-interest rate charge card, they will be more inclined to give you one.
4. Debt Consolidation
If you can’t or don’t want to get another charge card, or can’t get a personal loan from a bank, you may want to consider indebtednes consolidation with an institution like Lance Advisors.These companies will take all of your high-interest debt, they will pay it all off for you and then you’ll simply owe them at a lower rate. It works like this. Let’s say you have 3 high-interest credit card. One you have a $10,000 balance at 20% APR. The second card you have a $5,000 balance at 18% APR and a third card your balance is $15,000 at 15%. You have a total of $30,000 in credit card indebtednes with an average of 17.5% APR. You can call up a company like Lance Advisors. They will pay off your card balances totaling $30,000. Now you will owe them the $30,000, but you’ll be paying a much lower interest rate. Plus, you’ll merely have one creditor to make payments to, attaining it easier and cheaper on fees.
5. Home Equity Line of Credit
Another way to lower your monthly payments is by taking out a Home Equity Line of Credit, also known as HELOC. This is where you use the equity in your home to take out a bank loan. Then you take the bank loan and pay off your credit cards. It’s the same principle as debt consolidation but uses your home to secure the loan. Let’s say you own a home that gets appraised at $200,000 and you still owe $150,000 on the mortgage. That gives you $50,000 in equity. The bank can give you a loan of $50,000 secured by the equity in your home and the rate is usually close to the rates they would give you for a mortgage. Currently it can be around 4.5 -7% depending on your bank and credit rating. That rate is much lower than the 18% APR the average American is paying on their charge card. The only downside to this is that you are using the equity in your home to take this loan out. That means if you fail to make the required monthly pays on the HELOC, you could lose your home. There are many creative ways to reduce the monthly pays that you have on your debts. Often, we can be victims of a learned helplessness that causes us to believe we are doomed to the monthly pays we are currently having to make. That is not true. There are ways to lower them.
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