1 easy step to reducing your debt
There is only one way to reduce your debt. Pay it off!
I know... you're blown away at my wisdom in financial matters. However, there is nothing you can do about reducing your debt other than to pay it off. The time it takes you and what it actually costs you are an entirely different matter.
Here are a few pointers to help you on your way.
- Reduce the interest rate This one simple action could save you hundreds, if not thousands, of dollars. In some cases you may need to pay some fees for changing to a lower charging interest rate and depending on your debt amount this may or may not impact you adversely. Make some calculations using your MS Excel spreadsheet by calculating the CUMIPMT (Cumulative Interest Payment) on your loan based on two different interest rates.
- Reduce the time If you've reduced the interest rate the next best thing to do is to try and take quicker at paying it off. If the loan is being paid monthly, begin to pay it off fortnightly at half the monthly rate.
Increase your payments by paying more each time or by making more payments. This will reduce the amount quicker and pay less interest.
- Change the loan holder Some banks and FI's charge monthly fees associated with your loans while others don't. Shop around until you can find a bank or FI that charges less interest and little or no bank fees.
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