Debt is something that is on all of our minds, especially if you’re on the cusp of retirement. No one wants to work too much in life, and there are some people that ultimately want to get rid of all of their outstanding balances before they officially retire. However, getting rid of debt is easier said than done, and it takes a lot of financial management and budgeting skills in order to pay it off. There is, however, a smart way to pay off debt that doesn’t involve reducing your way of living too much. The trick? It involves a loan.
Before you roll your eyes and close this article, read on to find out how exactly you can pay off your debts with a personal loan and how it can actually be advantageous to you instead of just the banks.
Paying off a debt with more debt sounds crazy…
But it’s a real thing. But first, let’s change the entire premise; you’re not paying off debt with more debt, you’re paying it off with a loan. This is known to most people as debt consolidation and there are consolidation companies that are designed specifically to help with this.
How it works is you count up all of your debt and you pay it off in a single lump sum. Debt cleared! But then instead of paying back several credit companies and businesses separately, you simply pay off the one lump sum that you took out a loan for. Although it seems like a monumental amount, the idea is that you can get lower interest rates which means you end up paying less than you should before. The longer you leave your debts, the higher the interest, which is why paying off your debts early is such a big thing.
The advantage of getting a consolidation loan is that you pay off all of your debt without incurring more interest to several companies, and you just have a single loan to pay off which reduces your stress and ultimately puts you a step closer to paying off the money you owe.
Ways to assist in paying off your debt early
Now that you’ve consolidated your debts into a single payment, here’s how you can get rid of it early so you can safely retire without any financial issues. First of all, try and pay extra whenever possible. As mentioned before, paying off your debt early is a great way to reduce the overall amount of you have to pay back. Even if it’s just a couple of dollars each week or just rounding up your repayment amounts, try to add a bit extra and you’ll end up paying off your debt a couple of weeks or months earlier than the proposed date.
This ultimately means you pay less interest and clears all of your debt earlier. It’s not the easiest way considering it takes money to do it, but as long as you’re willing to make compromises in your lifestyle and budget to save more money, it’s a sure way to get rid of your debt earlier.