Getting money from credit card loans feels fun and free at first, but as soon as the loan bills arrive, the question of how to pay them persists. When spending gets out of control and interest rates keep on piling up every month, the burden of loans gets heavier and becomes more problematic.
Indeed, being stuck with revolving debt for a long time feels like it is hard to find a way out. The good thing is, there are ways of getting out of revolving debt faster regardless of how huge the credit card loan is. Repaying credit card loans faster is a better solution than anything else when pursuing financial freedom and sustaining positive credit scores. Thus, here are some ways to repay your credit card loans faster.
Prepare a Budget
In preparing a budget, list everything about where the money goes. This includes the sources of income, the income itself, monthly expenses, emergency funds, etc. After that, deduct all the expenses from the income, excluding the debts. If there is excess money, pay the debt.
However, if there is no excess money or the excess is not enough to pay the debts, try to adjust the budget. Thus, there’s a safe online loan that can help you prepare your budgeting method. The budget can be adjusted by cutting expenses or finding another way to increase income.
There are lenders that allow you to restructure your payment plan or move your due date. Take Crediteck for example, you can change your due date so you could stay on top of your payments and save money. This feature is a great help to your budgeting as it makes it easier for you to track payments and avoid penalties.
Limit Yourself From Using Credit Cards
Consistently using credit cards while pursuing to repay credit card loans faster would not help solve the problem even if using the credit card is to repay the credit card loan. Remember that the goal is to avoid being stuck with debt by incurring an increasing interest rate for a long time.
Thus, in the meantime, always control spending habits to avoid debt. Prioritize the needs over the wants and save money. As long as possible, use the existing cash when buying stuff. To refrain from using credit cards, keep the cards away by removing them from your wallet and putting them in a hidden place. It may be tough to do, but it effectively helps to repay the debts faster.
Pick Your Desired Repayment Method
It is not easy to repay debt as it may hurt pockets. But to advance with the fast increasing interest rate charges and avoid being trapped in the revolving debt, there is no other better solution than to pay the debt. Thus, to repay credit card loans with a bit of ease, the following are some repayment methods to help.
Avalanche Repayment Method
After prioritizing all the debts from those with the highest interest rates to the lowest interest rates, it is now time to apply the avalanche repayment method. In this method, the excess money from the budget to pay the debt should be allocated to the credit card loan with the highest interest rate.
When it is being completely paid off, the following loan with a high-interest rate should be paid off next. The process will be the same until all the credit card loans have been completely paid off. The avalanche repayment method helps to save money from interest rates. However, sometimes it could be discouraging because it is hard to eliminate the largest debts, taking a long time to pay fully.
Snowball Repayment Method
The snowball repayment method is quite the opposite compared to the avalanche repayment method. In the snowball repayment method, all the debts are prioritized from those with the lowest interest rates to the highest interest. The excess from the budget intended for paying the debt should go first with the lowest interest rate debt.
After your loan is completely paid off, the second one with the low-interest rate should be paid with the excess. The repayment should follow the same process until all the debts have been completely paid. This method may give a motivation to pay the debts faster. However, those debts with higher interest rates have been allowed to accumulate over an extended period. Thus, higher interest rates are more likely expected in the long run.
Repaying credit card loans faster is a significant step in achieving financial freedom. It is hard to repay debt, but the ease with which it may be done depends on one’s nature and the discipline of the one who pursues it. There is no need to wait long or hope for great timing when paying debts because it is better to be paid as early as possible.
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