How To Pay Off High Interest Debt Quickly In Burlington

How To Pay Off High Interest Debt Quickly In Burlington

Posted on May 27, 2021

As part of our auto loan blogs, we often suggest listing all your debt in a budget spreadsheet and ordering them by the interest rate. If you do that, how can you pay off high interest debt quickly? How can you minimize the amount of debt you pay?

Our Burlington auto loan team offers a few ways to pay off high interest debt.

We recommend paying off debt with the highest interest rate first because more of your monthly payment on that debt is going towards interest. The longer you have that debt, the more money you’re paying out that isn’t benefitting you directly.

That’s why paying off high interest debt first is a good idea.

Here are some ways to settle high interest debt affordably in Burlington.

Negotiate the debt down

If you’re having trouble paying off debt and are struggling financially, there is help at hand. Discuss the situation with your creditors and see if you can negotiate your debt down.

A lender would rather you repay 50-70% of a debt than risk not paying anything so it is often possible to negotiate the debt down. This is only really relevant if you’re genuinely struggling and are risking a default though.

Consolidate your debt

If you have multiple credit cards or multiple debts, you could get a single loan to pay them all off. You could use a personal loan or an auto loan with cash surplus to pay everything off.

This means initially taking on more debt but should end up with a single loan with a single outgoing each month. Usually at a much lower rate than credit cards and other debts!

Refinance your auto loan

You can consolidate debt using an auto loan if you already have one. If you’re a couple of years into your loan and have paid some of it off, you could reborrow up to the value of your car and use the cash to pay off debt.

You would need to make sure you could pay off all, or the vast majority of your debt to make this worthwhile but it’s a viable way to pay off creditors without leaving yourself short.

Balance transfer credit cards

If you’re mainly carrying credit card debt you could use balance transfer credit cards or 0% introductory deals to save money. Make sure those new credit cards don’t charge fees or that those fees are sensible.

Open a new card, transfer your high interest debt to the new card and pay it off as quickly as you can. Close the old card and keep the new.

Just before the 0% period is up, find a new balance transfer card and rinse and repeat. Do this until it’s all paid off.

Make more or save more

If you’re in debt, you can get out from under it by earning more or saving more. It’s much easier to suggest than to do but it is definitely possible. I have had side hustles to pay off credit cards and to save for down payments on cars.

If I can do it anyone can!

Contact Unique Chrysler for help, advice and competitive Burlington car finance and leasing.

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