No one likes being in debt or owing money to someone, but there is a large percentage of the population in the United States that is currently in debt or thinking about getting a loan. With that in mind, having some knowledge of the ways to reduce your debt is important for controlling your financial future.

Here are a few tips that can help reduce your debt. Try to apply as many of these tips to your life as you can so that you can reduce your debt faster.

Spend Less Than You Earn

Many people fall into debt because they don’t make a budget and then spend their salary on things they don’t need. They sometimes buy things that they can’t afford, fooling themselves into thinking that they need them. You shouldn’t buy everything your heart desires. Wants never end, money does. So unless you are sure that what you’re spending money on is required, don’t waste money on it. Try not to give in to impulses. Instead, you can use your money to pay off existing debts or any other loans that you might have.

Get a Debt Consolidation Loan

Check with a lending advisor at your financial institution to see if you can take advantage of any debt consolidation offers. If you can get a debt consolidation loan,  you can combine your debts into one loan with one payment and a lower interest rate.

While this can be a huge help in reducing your debts, it doesn't eliminate any money you already owe.  You'll need to make sure you're not building up any new debt while you pay off the debt consolidation loan. 

Pay More Than the Minimum Payments

Paying minimum payments on your debt only prolongs it. The longer it takes to repay a debt, the more interest you will be charged. Make sure to always pay more than the minimum amount so that you can get out of debt as soon as possible. Make a few changes to your lifestyle in order to spend less and you will have more money to pay off your debt.

Take Money from your Savings

Another way to pay off debt is to tap into your savings and investments. Although this may seem like a bad idea as it can harm you in the future, it is equally bad to be in debt during your retirement. So it’s better to clear off any loans or debts you might have before you reach retirement. The interest rate on your debt can be much higher than the money you are earning through your investments. So the longer you wait to repay the debt, the more money you will waste. You can always save up again once you are debt-free.

Pay Your Most Expensive Debts First

While paying more than the minimum on your debt each month is a good strategy, paying off the most expensive debt first is also a good step. Instead of paying a little on all your debts, you focus on the one that is the biggest and has the highest interest rate. Once that debt is paid off, shift your focus to the second most expensive debt, and so on. Continue this pattern and you will be left with the least expensive debts that can be paid off quickly. This technique works well and also makes you feel like you’re making progress each time a big debt is paid off.

Get a Second Mortgage

If you own a home, then you can get a home equity loan to pay off your debt. Your home has equity; which is the worth of your house after you deduct the mortgage you owe from the current value of the house. A home equity loan can help you pay off debts quickly because if you get approved, you are given a large sum money on the spot. You can use this money to pay off everything you owe. One downside of taking out a home equity loan is that you will just be taking another loan to pay off a debt. You will still be indebted to the lenders for years until you have enough money to pay off on your mortgage.

Reduce Your Debt Faster with Help from First Alliance Credit Union

If you are in debt, it is best to start paying it off as soon as possible to avoid high-interest rates. You are already paying off your debt, so following these tips right off the bat can make the process even quicker.

Of course, you can also schedule an appointment with one our our knowledgeable Advisors anytime. We' can help you figure out the best way to reduce your debt, from getting a debt consolidation loan to helping you figure out which debt to pay down first.

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