Neon Funding has joined Cobalt Advisors and Apply Credit 9 and Saxton Associates in flooding the market with debt consolidation and personal loan offers in the mail. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Neon Funding, Cobalt Advisors, Saxton Associates, Hornet Partners, Piper Funding, Carina Advisors, Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).
How much debt do you owe? Is your ballooning debt making you more worried than ever?
As soon your debt goes over $10,000, you’re no longer in control: struggling to pay off credit card bills for things that aren’t longer in your possession. Besides, you lose access to the seed money that intended to fuel your investment ambitions and allow you to become financially independent. Still, there’s light at the end of the tunnel. Follow these three steps and pay off $10,000 in debt with ease.
1. Get It in Writing
The first step to help you erase your debt may seem a tad too easy, but it’s the step in the right direction Open an Excel spreadsheet and make the columns for the following:
- How much debt do you owe?
- What are your minimum monthly payments for each debt?
- How much interest do you pay towards each debt?
- If you have a mortgage with an adjustable rate or a credit card with a promotional rate, specify when the rates are expected to change.
Here’s what your debt list should look like:
- Personal loans
- Vehicle loans
- Student loans
- Home equity loans
- Mortgage
- Credit cards
- Loans from family members
- 401(k) loans
- Payment plans for the mechanic, veterinarian, doctor, etc.
Note the sum of all these loans.
2. Choose a Debt Destroyer Plan
Next, you create a debt repayment plan to pay off $10,000 in debt. Go back to the last step and prioritize your loan .i.e. decide which ones do you think should be cleared before others. You can follow two methods to make this decision. Take this seriously if you need a way to get out of credit card debt.
- Debt Killing Method #1: You can arrange your loans by their interest rates. Prioritize the one with the highest interest rate and pay it first. This method is ideal for those who are looking to save as much as possible.
- Debt Killing Method #2: You can also order debt in terms of their balance. Pick the loan with the least amount of balance and focus on reducing it. This strategy can keep you motivated because you close more debt in less time.
3. Apply Pyramiding
Lastly, you are going to use a strategy, which is popularly known as pyramiding. It directs all the efforts on a single debt and then moves down to knock our balances one-by-one. Pyramiding is quite effective when it comes to paying off $10,000 in debt.
Your pyramiding strategy depends on the method you used in the 2nd step. You can focus on paying the minimum amount to all the balances and contribute the most to the debt with the highest interest rate.
Or you can simply pay the minimum amount to all balances and concentrate on the debt with the smallest balance. Over time with regular payments, you can get rid of a certain debt. Next concentrate on another balance and repeat the approach.
How to Boost the Pyramid Growth?
Pyramiding offers benefits, but they are more psychological than tangible. It directs your attention to an effective game plan and shows excellent results in a short period. It makes you believe that you can pay off $10,000 in debt.
Pyramiding is certainly better than your previous approach: Putting small amounts equally to all debt without enjoying any major benefit. Pyramiding is instant: it pays off your balances and gets your debt disappeared steadily.
Pyramiding can only work if you have extra cash that you can redirect to a specific debt. So much extra cash are we talking about? Well, you can start with $200. It can ensure that your debt repayment plan ends up being successful.
Reach the $10,000 Mark
Paying off $10,000 in debt may seem tough, but it’s within the realms of possibility.
However, if you don’t earn much, then it can be hard for you to pay off $10,000 within a year. Let’s see how it is possible
If you are targeting $10,000, then you are likely to pay $900 in a month. A large sum of this money is already being paid via monthly payments. While this money does reduce the principal amount, it’s also used to pay interest. Get your account statements to check the breakdown of your monthly payments .i.e. how much money goes to the principal amount and how much goes into the interest.
Note the total current monthly principal payments and subtract it from $833. For instance, if $440 of your money goes to principal payments, you need to generate another $460. This can ensure that you meet the $10,000 target within 12 months.
There are several approaches to come up with extra cash:
- You can get a new job. If possible, consider brushing up your IT skills and work remotely. A remote IT career helps you to get more money in fewer hours.
- You can sell unneeded, but valuable stuff.
- Save money. Review your current spending and see if it’s possible to curb down spending. For instance, you might be paying too much on electronics.
There are countless other ways to generate more money. Get in touch with us to unlock the secret of making extra money.
Download a budgeting app from the App Store or Play Store. Many people rely on these apps to create and manage their budgets.
Similarly, you can also consider if you can get some relief with your existing debt, such as student loan debt, tax debt, or credit card debt.
Final Thoughts
Don’t panic. By saving money and finding a passive income stream, you can easily generate $460 or more to work on your debt pyramid. Hence, paying off $10,000 in a year is doable. Also, remember with the current COVID-19 situation, you can sign up for different relief programs when it comes to debt. Consider getting help from financial help and you might get lucky in eliminating some of your debt permanently.