Here is a way to help you get out of debt. I learned this from a friend of mine who sold a financial discipline service and it can get you out of
debt a lot sooner than you are supposed to be out of debt. And.. If you have the discipline to do it yourself you can avoid the fee that they charge
you to set it up.
First lets start with some examples:
1. Car Loan, lets just say 400 a month at 5% interest for 5 years.
2. Student loan, Lets say 150 a month at 7.5% interest for 10 years.
3. Credit card debt, Lets say 100 a month at 20% interest for variable time.
4. Home loan, Lets say 1500 a month at 6% interest for 30 years.
Ok.. So the car loan has the least amount of time on it but it is at a low rate of interest so it will be the first to be paid off. although the
credit card has the highest interest level, so you want to try to pay that off first.
If possible try to get a loan from your bank at a lower interest level to pay off the amount of the credit cards. (second mortgage, Personal loan,
You will still owe the money but it will at least be at a lower interest rate.
Ok so step 1. Take the payment that has the lowest amount of time on it, in this case it is the car loan at 400 a month, When it is paid off, take the
400 a month you were paying to the car and apply it to the next loan in line.
In this case it would be the student loan at 150 a month, But instead of paying 150 a month you are now feeding 550 a month toward that loan and
accelerating the payoff date on it. (See where I'm going with this?)
Ok so now the car and the student loan are paid off freeing up 550 a month to apply to the next debt in line, in this case it would be the credit card
at 100 a month so instead of paying the 100 a month, you would be paying 650 a month and accelerating that debt's payoff date.
Now when that one is paid off we go on to the home loan at 1500 a month but instead of paying 1500 a month you will add another 650 a month to that
and pay 2150 a month and accelerate that debt's payoff date.
In the long run you will save many thousands of dollars in interest and you will be out of debt in about half of the time (or less) that you were
supposed to be in debt for. All it takes is discipline to do it. I am personally doing this on my own and I will be free and clear of all of my debt
(2 cars, student loan and a home) in about 14 years instead of 30. Also I will end up saving over 100,000 dollars in interest money over the life of
the debt. (30 years)
You don't need a financial planner to tell you this, or a credit counseling service. It's simple. All you need is the discipline to stick to the
program I have explained here and you will be thousands of dollars ahead in the future.
Debt sucks! I've been there. But this can help you and many others get out of it. the least I can do is explain it to you and help you get out!
Also.. This is the bonus part...
Once you are out of debt...
You now have 2150 a month IN YOUR POCKET! to do with as you please.. Reinvest it.. get back some of that interest that you paid! Build cash reserves
for the future! Enjoy that cash! You have earned it! Let it earn for you!
I hope this helps. It takes some time to see big results but you will see them once the first debt in line is paid off. The rest will fall off rather
quickly once you have started.