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The Biggest Financial Regret for Americans: Low Savings

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Low Savings

Low savings have always been a major problem for most Americans. In fact, many Americans don’t even have enough to pay for an emergency that requires a few hundred dollars. The coronavirus crisis has hit almost everyone hard, but the worst affected are certainly those with low savings.

The coronavirus epidemic is taking a big toll on the economy as millions of Americans now find themselves without work. Experts are predicting a huge economic meltdown, the likes of which have not been seen in decades. In such a scenario, the biggest regret that the average American now has is not saving enough for an emergency, according to a Bankrate survey.

Americans have Low Saving

Low Savings

According to the results of the Bankrate survey, 23 percent of Americans said that their biggest financial regrets were low savings. You would expect that the biggest financial priority would be saving more. But that wasn’t the case. The biggest financial priority turned out to be paying off all debts to become debt-free.

Paying off debt was the number one priority of 22% of respondents. Saving enough for an emergency was the second-highest on the financial agenda at a mere 17%. Sadly, many Americans are so deeply mired in debt that becoming debt-free is the biggest financial goal at the moment. Saving enough for an emergency will only be possible if people are debt-free in the first place. Low savings will continue to be a major financial impediment till the debt problem is dealt with.

It might appear that paying off debts and saving more cannot be done at the same time. However, with proper financial planning and tighter control over expenditure coupled with increased earnings through part-time work it may be possible to pay off debt and save more concurrently.

Low Savings Across Income and Age Groups

Out of the 1300+ Americans surveyed, all income groups reported that low savings were their biggest financial regret. This reflects the sad state of affairs. It’s not just low income Americans, but also higher income Americans who are just not saving enough. However, not every age group was concerned with low savings. Younger people may feel less compelled to save more thinking that they can always do it later. Unfortunately, this creates a vicious cycle where they keep putting it off until they find themselves with low savings during a crisis.

Another survey that Bankrate carried out previously in May showed another disturbing trend. Around one in four Americans had borrowed from their retirement funds to get through the coronavirus crisis. Regrettably, this will only worsen the low savings issue. The coronavirus crisis is making several financial problems much worse for Americans, including the repayment of debt.

No Financial Priority

But perhaps the most disturbing statistic of all was the percentage of Americans who did not have a plan. 17% said that they were not aware of their financial priorities. This clearly shows that a high number of Americans do not have a financial strategy. Americans need to take stock of their financial situation, set their priorities and work towards these goals. This will help them to avoid low savings and be better prepared for unexpected challenges like COVID-19.

Retirement

A shockingly low 12% said that their top financial priority was saving enough for retirement. With so few Americans setting retirement funds as their top priority, it is highly unlikely that most US adults will be able to enjoy a comfortable retirement. It seems that many will be forced to work well into their golden years. Americans clearly need to review their financial priorities in context of their future. They need to realize that they must have enough for their nest egg to retire during their golden years.

Without enough funds, they will not be able to retire. They may be doomed to work for life. But even that will not be possible because health starts declining rapidly post 60. Those who think that they can continue working away into old age may probably be too sick to earn a living. Taking into account such dire possibilities, Americans should get in touch with a trustworthy financial advisor and start working soon for their future with retirement funds as their top financial agenda. They should start planning and working today so that they do not find themselves with low savings when approaching retirement age.

The survey also questioned Americans about how much they regretted low savings. For emergency savings, 16% said that they regretted it very much while 22% said that they felt some regret for their low savings during and emergency. As for retirement savings, 16% said they felt deep regret while 23% said that they were somewhat regretful for their low savings.

However, the level of regret (for low savings) was substantially less for those who had to pay off debts as it was for those enduing unstable income.

As you would expect, younger people were less worried about low savings with Generation X and millennials showing less regret than older age groups like the Silent Generation and Boomers. Older people find that they have far less opportunities for saving more as compared to younger people. Hence, senior citizens are more likely to regret low savings.

Low Savings: A Top Financial Concern

Not saving enough for emergencies and retirement funds was the top concern combined. At 43%, low savings (for both emergencies and retirement funds combined) were the biggest financial regret for the 1,300 Bankrate survey respondents. The numbers closely follow the results of a previous Bankrate survey that found a vast majority of Americans lagging in their retirement goals.

Americans will need to take concrete steps to solve the low savings problems. They must use automated transfers to save money as soon as their earnings reach their accounts. This can greatly reduce the problem of failing to meet savings targets each month. The money that they save this way can become a part of their savings portfolio and start generating passive income.

There are many other steps that you can take to tackle the issue of low savings. Get in touch with your financial advisor to find out more.

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Bruins Capital Credit Card Relief Program Helps Those With High Debt Ratios

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Bruins Capital Debt Ratios

Who is Bruins Capital?

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Bruins Capital recognizes that a growing number of Americans have been burdened with high debt ratios in 2020 & 2021. If you are one of them, you will likely be considering one of many credit card relief options that promise to help you manage your debt and make the repayment process easier for you. Such options are usually aimed at lowering the interest charges to halt the growth of the existing debt.

The Bruins Capital debt consolidation program wants to take your multiple interest rates, multiple due dates, multiple credit card bills, and streamline them all into one easy way to pay off your debt through an unsecured debt consolidation loan. Streamlining means a better understanding of your finances. Streamlining means you can think ahead. Why be financially cluttered? Streamline your finances with Bruins Capital.

Bruins Capital Will Lower Your Debt Ratio
Credit: Aysezgicmeli

The Rise in US Household Debt Ratios

Debt ratios help you to determine the health of the economy and the average debt that households owe. Key among these is the debt-to-income ratio, which enables us to understand the personal finances of families in America. Calculating this debt ratio is simple. You can compute this debt ratio simply by dividing the monthly debt payment by the total monthly income.

For instance, if your monthly debt payment amount stands at $6,000, whereas your monthly income is $10,000, then your debt to income ratio is 60%. This is a high debt-to-income ratio and it shows that you need to work out your monthly income and expenses for servicing your debts in a better and faster way.

Hence, debt ratios indicate your financial state. This is important for other reasons as well. If you want to get a debt consolidation loan then depending on your lender, you will need a debt ratio under a certain amount. If your debt to income ratio is below this amount then you can qualify for the loan. But if your debt ratio is above or equal to this threshold, then you will not qualify.

Debt Ratio Limits

For instance, if you want to take out a mortgage, then your debt ratio needs to be under 40% for most lenders. Financial advisors recommend a debt ratio of well under 30% for healthier finances. If your debt ratio is too high then you might face the trouble of all sorts. If you choose to pay your entire monthly dues (for which you don’t really have a choice, to begin with) then you may have too little remaining for your necessities and leisure when your debt ratio is too high.

If you fall back on your monthly dues and cannot pay the full amount, then you will face all sorts of problems including lowered credit scores, lawsuits, and being susceptible to loan scams.

Debt Ratios Increasing

Debt ratios along with the financial stress of American households have sadly increased over the decades. If you look at the Federal Reserve data, then there was a slow but steady increase in debt ratio starting from the 80s. Just before the housing market collapse that triggered the financial meltdown of 2008, there was a steep rise in debt ratios. This goes to show how critical debt ratios are for the health of the economy. If households, businesses, and other entities have debt ratios and credit card bills that are too high, then this can possibly trigger financial catastrophes as the nation painfully learned in the aftermath of the 2008 crisis.

Following the financial crisis of 2008, there was a sharp downturn in debt ratios for American households. One important reason for this is that many declared bankruptcy. Another reason for this is that households became more cautious of borrowing large amounts and thus started borrowing less due to which the debt ratios plummeted.

Overall, debt ratios have skyrocketed since the turn of the century. The US Census Bureau shows that in 2000, the median debt was almost $51,000. But now the median debt for American households now stands at a staggering $137,000. The debt amount has more than doubled. The trouble is that median household income during the same period saw a rise of only $20,000. In 2018, the median household income was $61,372. Hence, the debt ratio has outpaced the rate of income growth. The troubling rise in debt ratios indicates that Americans are borrowing at a much faster rate and may find it harder to keep up with repayments.

Debt Ratios Among Various Households

Debt ratios can also vary according to family types. Married couples usually carry less debt than singles. TD Ameritrade carried out a study in 2017 showing that just 29 percent of singles consider themselves to be financially secure compared to 43 percent of married couples.

Married people also earn more on average than singles. A married person on average earns around $61,500 each year while a single person on average makes about $52,900 per annum. One reason for this could be due to the increased pressure on married couples to earn more for their children.

Married couples also save more than singles. Around a third of singles don’t save compared to 17 percent of married persons who do not save. Once again, this could be due to higher pressure to provide a safer financial future among married couples.

Rising Debt Ratios and Their Factors

Debt ratios have continued to rise following the 2008 financial crisis. Although debt ratios in America are on average lower than in other countries, this could still create problems where too many consumers need help to erase the debt. The rising debt ratio might mean that many households need credit card relief for unpaid credit card debt and may be denied access to credit in the future when they need it. The rising debt ratio can also lead to a widening of the financial divide between age groups and communities, worsen inequality, and increase the need for credit card hardship plans.

Much of this debt can be attributed to mortgages which account for around 70% of household debts. The good news is that mortgage defaults are now much lower than what they were back in 2008.

In the aftermath of the 2008 debt crisis, credit card consumers’ debt ratios fell sharply as a result of delinquencies and cautious borrowing. However, debt ratios have seen a steady rise since then and the total mortgages that households owe are similar to levels that preceded the 2008 financial crisis. And customer reviews have been dropping fast. Another startling trend is that student debts are rising fast and further worsening debt ratios across households.

In the third quarter of 2008, students that took out loans amounted to around $600 billion. But in the third quarter of 2018, student loans reached a staggering 1,400 billion. That is, student loans have more than doubled during a time period of one decade. This is one major reason why debt ratios for households look rather troubling.

Another key reason for the rise in debt ratios is due to the sharp rise in auto loans and too much credit card debt which leads to debt consolidation loan vs refinancing. During the same time frame as mentioned above, the total amount of auto loans went from $810 billion to $1,260 billion.

To ensure financial stability in the future, the US must assess its debt ratios and improve them by increasing income levels and reducing borrowing.


Tribert Rujugiro Ayabatwa & The United Nations

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US Debt Relief Market Report from 2020-2025 by Leading Players – National Debt Relief, Freedom Debt Relief, Credit Associates, Pacific Debt Inc, Simple Path Financial

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Debt Relief Market Report

US Debt Relief Report

The debt relief industry is a dynamic part of the U.S. economy, accounting for roughly $5 billion in total economic output or roughly 0.02 percent of Gross Domestic Product. Debt relief companies currently employ around 6,000 Americans. In 2019, the US Consumer Debt Relief Services market size was US$1.5 billion, and it is expected to reach over $2 billion by the end of 2025, with a compound annual growth rate of close to 5%.

The US Debt Relief Report provides actionable insights to professional service firms such as market research, creative branding, and advertising companies. They leverage our services to analyze competition and explore the needs, motivations, pain points, and expectations of their clients’ target audience.

US Industry Trends

The debt settlement industry has benefited from the global COVID-19 pandemic. A slower economic recovery is evident with the number of Americans applying for unemployment benefits. Millions of American jobs are at risk while credit card issuers have cut credit limits to mitigate the financial risk for the banks.

During a recession, like the one we are experiencing now, people tend to borrow more money to pay bills or maintain their way of life when funds are low. Historically, this leads to a higher rate of delinquencies that credit card companies have to take on. This translates into a spike in volume and profits for debt settlement companies.

What is Debt Relief?

Debt relief is also called debt settlement, debt resolution, debt reduction, debt negotiation, or debt consolidation. Settlements are negotiated with the debtor’s unsecured creditors. Commonly, creditors agree to forgive a large part of the debt, though results can vary widely.

A debt resolution program can have considerable benefits for consumers who have low savings, are drowning in unsecured debt, and have exhausted all other options to get back on track. Outside of filing bankruptcy, entering a debt settlement program is one of the few options consumers have to negotiate with creditors.

Best Debt Relief Companies
Credit: Elnur

Table of Contents:

  • About this Report
  • Industry at a Glance
  • Industry Performance
  • Trump vs Biden
  • Regulatory Environment
  • CFPB Report on Debt Settlement
  • Consumer Complaints
  • Enforcement Actions
  • Products and Markets
  • Competitive Landscape
  • Major Companies
  • Lead Generators
  • Operating Conditions
  • Key Statistics

Why Buy The US Debt Relief Report?

It enables you to find out about key industry trends, identify threats and opportunities, plan strategically for marketing, and gain competitive intelligence over your competition. It provides the necessary information to perform SWOT, PEST, and STEER analysis. It will give you a deeper understanding of market dynamics and operational metrics to effectively compete.

The report includes a historical analysis of the key drivers of the debt settlement industry along with a five-year forecast of the market. Most importantly, it compares the competition according to 40 different metrics.

Top National Players Featured In Report

Freedom Debt Relief, National Debt Relief, Countrywide Debt Relief, Accredited Debt Relief, New Era Debt Solutions, Century Support Services, Liberty Debt Relief, Credit AssociatesPacific Debt Inc, Debt RX, JG Wentworth, Simple Path Financial, CuraDebt, Guardian Debt Relief, Premier Debt Help, California Debt Relief, SPF Saves, Oakview Law Group, Credit 9, Finance Solutions, Titan Consulting Group, Tripoint Lending,

To make a purchase, please email [email protected]crixeo.com.

US Debt Relief Market Definitions

SWOT Analysis

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT Analysis is a technique for assessing these four aspects of your business. You can use SWOT Analysis to make the most of what you’ve got, to your organization’s best advantage.

PEST Analysis

PEST stands for political, economic, social, and technological analysis. It is a management method whereby an organization can assess major external factors that influence its operation in order to become more competitive in the market. As described by the acronym, those four areas are central to this model.

STEER Analysis

STEER Analysis stands for socio-political, technological, economic, ecological, and regulatory, which are the types of issues that must be addressed before one decides whether or not to make an investment. A STEER Analysis is used as a risk assessment tool for investigating the impact of a venture or investment.

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How to Remove Bankruptcy from Your Credit Report?

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Remove Bankruptcy from Credit Report

There is no doubt that they all want to remove bankruptcy out of their credit reports. If you were forced to file for bankruptcy, then you are not alone. No less than hundreds of thousands of Americans file for bankruptcy each year. After all, the bankruptcy record in your credit report can make financial services inaccessible. So you must know how to remove bankruptcy from your credit report.

Remove Bankruptcy from Credit Score

Remove Bankruptcy from Your Credit Report

If your bankruptcy is not the result of credit card fraud or identity theft, then you can be almost certain that it will remain there for 7 to 10 years. It is not easy to remove bankruptcy from your credit report. But with plenty of effort and good luck, it might possibly be done. Even if you are not successful in removing a bankruptcy from your credit report, then you can still work on building up your creditworthiness.

So while you can take various measures to remove bankruptcy from your credit report, you should still not lose heart if your efforts do not bear fruit. You can work your way up and take steps to build up your credit score so that financial services are once more accessible to you.

Here is what you can do to remove bankruptcy from your credit report.

Determine Bankruptcy Record Errors

To carry out this step, you will need all three of your credit reports. It is important to make use of a good credit monitoring service like Transunion. Not only will it allow you to monitor your credit record, but it can also let you see your credit score for free.

You will have to look very closely at the bankruptcy record in all of your credit reports. Keep an eye out for all sorts of errors. These errors might prove useful in getting bankruptcy removed from your credit report.

Credit Dispute Letter

If you find any discrepancy in your bankruptcy record from any of your credit reports, then you might be able to send a credit dispute letter. The credit dispute letter can help you to pinpoint the inaccuracy. For any kind of discrepancy in your credit report, you should dispute it at once with a credit dispute letter. Send it to all three credit bureaus. If you are lucky enough, then the credit bureaus will not be able to verify your bankruptcy. They will then remove the bankruptcy record from your credit report. However, this is unlikely to happen if your bankruptcy filing is recent.

If you get lucky, then you might be able to remove bankruptcy from your credit report this way. You will not need to follow any of the remaining steps mentioned below. If your bankruptcy is a little old, then there is a greater likelihood that you may be able to remove bankruptcy from your credit report in this manner.

But if the credit bureaus claim to verify your bankruptcy, then you should move on to the next steps shown below.

Procedural Request Letter

If the credit bureaus verify your bankruptcy record, then you have to send them a procedural request letter. The purpose of this letter is to confirm from the credit bureaus who they verified the bankruptcy record with.

The credit bureaus will likely state that they verified your bankruptcy record from court. This may perhaps not be true because it is not the duty of law courts to verify bankruptcy with credit bureaus.

Courts

You may have already guessed by now that the next step is to get in touch with the court to confirm if the credit bureaus contacted them for removing bankruptcy. It is unlikely that the credit bureaus contacted the court. You will probably receive an answer that credit bureaus did not contact them for anything. You should take this statement in writing.

When you receive this written confirmation from court, you should then inform your credit bureaus about it. You can demand from the credit bureaus that they remove bankruptcy records immediately. Tell the credit bureaus that they knowingly provided false information which goes against the Fair Credit Reporting Act. This way, you might succeed in removing the bankruptcy record from your credit report.

You should know that such a process can be time-consuming and difficult. The problem is that there is no guarantee that it can work. However, it is better to try your luck than to do nothing about it. You might get lucky and have things going in your favor.

Contact a Professional to Remove Bankruptcy from Credit Reports

To increase your chances of success, you should get in touch with a professional credit repair agency. They are better aware of the steps involved and might be successful.

If you have filed for bankruptcy, then you would like to have the record removed from your credit report as soon as possible. If you are able to remove bankruptcy from your credit report, you will have instant access once more to financial products and credit. Bankruptcy may seem like an easy way out of your financial predicament. In most cases, you may have no choice but to file for bankruptcy.

While bankruptcy can save you in the short run, it can prove quite harmful in the long-term. You can almost be certain that banks and major financial institutions will not entertain your request for loans. Hence, you have to take your chances and remove bankruptcy from your credit report. The method described above is not foolproof; however, it can certainly increase your chances of removing bankruptcy from your credit record. Something is better than nothing. And who knows you might get lucky.

How long your bankruptcy record remains in your credit report depends upon the kind of bankruptcies that you filed.

If you have filed for a chapter 7 bankruptcy, then it will take a full decade for the bankruptcy record to be removed from your credit report because you have paid none of your debt.

The chapter 13 bankruptcy report is removed in 7 years since you have repaid much of your debt.

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Watch Out for These 6 Hidden Credit Card Fees

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When looking for the most economical credit card, you probably only look at the interest rates to check which is the lowest. However, hidden credit card fees are many of the charges a credit card carries.

Usually, credit cards come with various other charges, which you only discover later on when you end up having to pay them. So, unless you want to pay extra expensive fees on your credit card, you’ll have to ask about these hidden credit card fees.

Hidden Credit Card Exposed

Here are 6 hidden credit card fees you need to watch out for

1.    Balance Transfer Fee

A balance transfer credit card has many benefits. If your existing credit card’s introductory period is about to finish, and you want to avoid paying those high interest charges, you can transfer the balance to another credit card, for more time to pay off the balance.

Moreover, even if you have a lot of debts, you can go for a balance transfer credit card to consolidate your debts and make them easy to pay off. However, all these benefits are not free of cost. Usually, you have to pay a balance transfer fee for this service.

This fee is a certain percentage of the amount you are transferring. Typically, it is 3% to 5%, but some service providers can charge you even more. Therefore, before you decide to do a balance transfer, you should make sure that it is worth it, and the transfer fee won’t end up adding to your financial burden.

You can visit online marketplaces, such as Credible, which will allow you to compare different credit cards and the amount of transfer fee they are charging.

2.    Annual Fee

Annual service charges on credit cards are not uncommon. In fact, they are even more common for cards with extra benefits such as reward-earning or cashback offers. The more benefits there are, the higher the annual fees can be.

With some credit cards, this amount is somewhere around $50, which can be reasonable. However, for some credit cards, these annual charges can exceed hundreds of dollars, which can be a steep price to pay if you don’t even end up utilizing all those benefits and rewards.

Therefore, when you are choosing a new credit card, these are other hidden credit card fees that you carefully want to study before making a final decision.

3.    Late Penalties

As far as hidden credit card fees go, late penalties don’t exactly come out of the blue. If you end up missing the last date for making the payment, you do expect to face some late penalty.

The precise penalty charges depend on the credit card provider, but usually, it’s a standard amount of $25 to $40. Paying these charges once due to some genuine issue shouldn’t be too much of a problem.

However, if you are facing some serious financial troubles and you keep missing the payments, the late penalties can only make the situation worse. Therefore, if you want to avoid these charges, you should set up automatic debit payments with the minimum amount possible to avoid the late penalty.

Besides the extra money and hidden credit card fees you have to pay, late penalties are also not good for your credit score. So, try and avoid them as much as possible. Moreover, you can even consider talking to your credit card provider to waive off the charges if you’ve a genuine reason.

4.    Penalty APR

A penalty APR is one of those hidden credit card fees that many people are not aware of. Late charges are not the only kind of penalties you have to face. Sometimes, credit card companies can also charge you a penalty APR.

If you continuously miss out on the last day to make your monthly debt payment or you use up the entire credit limit available, you could face a penalty APR. This means your credit card provider could charge you a higher interest rate as a penalty for your credit card performance as hidden credit card fees.

Penalty APRs are quite dangerous as they can trap you in a debt cycle which is hard to escape from. Especially if you have a limited budget and are already struggling to pay off your debt, a high-interest rate can make it even harder to get ahead on your payments.

If you are stuck with a penalty APR, try to get rid of it as soon as possible. Make the next few payments on time and ask your provider to lower the interest rate if you qualify for it.

5.    Cash Advance Charges

As mentioned earlier, the more benefits a card offers, the higher the charges on it. Similarly, some credit cards provide the option of cash advances. You can either write a check or directly withdraw cash against the credit line available.

However, you have to pay cash advance charges for availing this service. It can either be a standard charge or a percentage of the amount of cash you are withdrawing.

6.    Paper Statement Charges

Usually, when you are first signing up for a credit card, you have the option between receiving a paper statement or an electronic statement of your credit card activity and account. If you choose the paper statement, you will have to pay for it and this will be another hidden credit card fees.

Credit card companies have started charging for paper statements to discourage the use of paper, which usually goes to waste, and encouraging customers to opt for electronic statements instead.

Avoiding These Hidden Credit Card Fees

If you are wondering how you can avoid all these hidden credit card fees or at least be aware of them before you get a credit card, there is a very easy way. All you have to do is go through the details and terms and conditions carefully. This includes all the fine print as well, according to Tara Alderete, who is the director of education at Money Management International. Once you know about all these hidden charges, you’ll be in a better position to decide the charges you can afford and which credit card

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Can Simple Path Financial Help You Pay Off Debt Faster?

Today, millions of Americans carry debt on their accounts. Many people who want to pursue debt elimination consider whether taking a personal loan to pay off debt is a good idea.

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Pay Off Debt Faster in 2020

Today, millions of Americans carry debt on their accounts. Many people who want to pursue debt elimination consider whether taking a personal loan to pay off debt is a good idea. In the majority of cases, it’s usually possible to pay off debt faster than one anticipates. Companies like Simple Path Financial and Fiona offer debt consolidation and debt settlement services. These types of companies have been growing in popularity and also consumer complaints. It is sometimes hard to figure out what to do.

You need to have a systematic approach and access to the right financial tools. If you are unsure about how to pay off debt faster, then we’re here to guide you through the various options. Let’s get started by understanding debt and its various types.

How does debt work?

Debt is the amount that you borrow from a lender, such as a bank, company, government, or even a person. This amount is considered debt, and you have to repay it with interest within a predetermined period. The length of the period and the interest rate combine to make the terms of a loan.

Debt can either turn out good or bad for you, and it mainly depends on how you utilize it. There are several types of loans, such as car loans, credit card loans, personal loans, home loans, or the money that you borrow from family and friends.

Another common type of debt among Americans is student loans. If you use loans strategically, they can bring you closer to your goals, such as buying a home, getting an education, starting a business. However, if you don’t manage them responsibly, they can cost you heavily in terms of money as well as time.

Pay Off Debt Faster With Debt Consolidation
Editorial Credit: LTim

Pay off debt faster

Several options can be used to pay off debt faster. Take a look at the following most commonly used ones:

1.    Debt consolidation

If you have high-interest credit card debt, then debt consolidation is probably the most popular method to pay it off. Debt consolidation allows you to combine all of your debts, and then you only have to make a single monthly payment, usually at a much lower interest rate. Taking out a personal loan to consolidate loans is the most common option.

The amount received in personal loans is used to pay off all your creditors, and then you only have to repay the personal loan.  Personal loans usually come with lower interest rates and a fixed term and can help you pay off debt faster and at a lower cost.

2.    Debt settlement

Debt settlement provides you the option of consulting with a third party, i.e., debt settlement company, to negotiate with your creditors a settlement amount on your behalf. Although it’s a good method of receiving debt relief, it comes with its risks. It can affect your credit history and can cost you a lot because you’ll have to pay the fee of the debt settlement company.  

3.    Home equity loans

Home equity loans are secured loans that require you to put your house up as the collateral. These loans usually have a much lower interest rate than credit cards. However, your house is on the line.

This option is usually not recommended, but if you have a lot of debt with high-interest, that requires a massive amount to pay off, then you can choose to go forward with this option.      

4.    401(k) loans

Some people take a loan from their retirement savings plan of 401(k) to pay off their debt. 401(k) loans usually have lucrative interest rates, but they aren’t recommended because there’s a risk of losing on gains on your retirement plan. Therefore, consider taking a personal loan instead of a 401(k) to pay off debt faster.   

Understanding your debt

Before worrying about how to pay off your debt faster, you’ll have to assess how much debt you have and what kind of debt it is. You need to find out the following to assess your debt situation more clearly:

  • The amount of money you owe in debt, bills, and credit cards
  • The total interest you’re paying on all your debts
  • Your APR (annual percentage rate)
  • The minimum monthly payment that you make

This information will give you a clear picture of your situation and will help you make well-informed decisions when you look for options to pay off debt faster. Make sure that you document this information on a spreadsheet or any other tool where you can keep updating it.

Assess what’s holding you back from paying off your debt

People usually advice generic things like saving up, minimizing expenses, and generating extra income to pay off your debt faster. However, life isn’t as simple as they make it sound. People usually take loans to pay off unexpected or emergency expenses. Besides, even if you have a good income, debt can still pile up.

But it’s important to assess your situation critically and understand what’s causing you to not pay off your debt faster. Once you have the answer, it will be easier to manage your finances and prevent debt from piling up in the future.

‘We deserve to have a big percentage’: Trump wants a US cut from a possible TikTok purchase from Microsoft

Other options to pay off debt faster

You can generate additional income to pay off debt faster. There are several ways to do it. Many people start providing freelance services to make some extra bucks. 

Today, several flexible part-time work options are available such as signing up with a ridesharing company, food delivery, home rentals, etc. These small side gigs can help you generate that extra income that could go towards paying off your debt.

You can also try selling your personal items or tools that you no longer use. One can sell almost anything on online platforms. Having a garage sale is also an excellent idea.

Conclusion

Several methods can be used to pay off debt faster, but the most important thing is to hold yourself accountable for your expenses to prevent any future inconveniences. You need to set yourself short-term and long-term financial goals to manage your expenses more efficiently.

Personal loans are an excellent way to discipline yourself while paying off debt because they have a fixed term, and you’re aware of the amount you have to pay each month. This helps you get more consistent and disciplined with your financial routine.

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