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How to Get Out of Debt and Save Money at the Same Time

Get Out of Debt

Managing credit card debt can feel like an uphill battle.

The more you owe, the larger the minimum balance payment is. The more time you spend only making minimum payments, the balance grows with interest. If you’ve missed payments, the minimum balance is even higher, and in some cases harder to catch up with.

Debt with a high interest rate is money that could otherwise be saved. The additional layer of interest that stacks on top of minimum credit card payments gets expensive and increases over time the amount of money you actually spent on the purchase.

The good news is that managing your credit card debt doesn’t have to feel like a struggle you won’t win. Using the right tools and resources, you can get ahead on your debt owed and save money at the same time. Personal loans give you the option to decide where and how you can best manage balances that collect interest.

Clear Debt Out of Your Way

Debt Consolidation Loans

Debt consolidation loans offer an alternative to paying high interest on multiple accounts. For example, if you have several credit card accounts that each collect a high interest rate, it can be a juggling act just to meet your minimum payments (you may be missing some payments too). With a low interest loan like a debt consolidation loan, you could pay off those high interest balances, and pay the money back with a better interest rate than any of your credit accounts offer. The less you’re paying in interest, the easier (and faster) it is to make timely payments toward paying off the balance.

Debt consolidation loans can save you money by helping you get caught up with late payments, preventing additional late fees, and helping you pay down the balance of what you owe.

Unlike debt consolidation services, there is no fee to borrow a debt consolidation loan. It’s a loan that you borrow at a low interest rate – simple as that. You may have already received correspondence from a debt consolidation service – those who charge a fee. For the sake of protecting your financial identity, be weary of unsolicited calls about your money. Most of all, seek out financial guidance from reputable financial institutions and resources.

Home Equity Loans

For homeowners, you may be able to leverage the equity in your home to catapult your financial planning. If you have credit card debt that is collecting a high amount of interest, you can save money by moving this debt to an account that collects lower interest. By paying your credit card debt off with a home equity loan, you are paying toward a new balance with a lower interest rate, and avoiding additional late fees, interest charges and the higher interest rate the credit card company charges you monthly.

If you have credit cards with high balances, that also collect high interest rates, it may be harder to make all those minimum payments on time. Since you’re paying the money back anyway.

When you borrow a home equity loan, you are using the equity you’ve established in your home like a line of low interest credit. The money you borrow at a low interest becomes part of the balance you owe on your home, like a second mortgage. Instead of having your mortgage payment and multiple, high interest credit account minimum payments, you have your mortgage payment, and your home equity loan payment to make every month. That also means you can save the money you’re no longer spending on late fees and high interest payments.

How to Get Out of Debt and Save Money at the Same Time

Using the right tools and resources, you can get ahead on your debt owed and save money at the same time.

How to Know What Personal Loan Works for You

Debt consolidation loans are available for renters and homeowners, while home equity loans are exclusive to those who have some equity in their home. The purpose of a personal loan is to help you make gains toward your financial goals. If you’re in so much debt that you can hardly meet your minimum monthly payments, talk to a trusted financial advisor at PrimeWay Credit Union about which personal loans could help you out of debt while saving cash at the same time.

Author Bio

Andreana Binder

Andreana always looks for ways to make life better through good food, exercise and creative flow - that rarely stops! A corporate writer by trade, Andreana also enjoys teaching workshops, making art, blogging, and sharing good food with friends and family. You can find Andreana soaking up the sun at the park with her mini schnauzer Murdock in her free time when she's not writing, cooking, creating or watching scary movies.

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