Debt consolidation services are one way to help individuals get relief from creditors and, particularly, those harassing creditors. The service may require a small fee to initiate the process, but the relief received from the service can be far more valuable than the small charge initially imposed.
However, that is really worst case scenario. For most people becoming debt free is just a case of sticking to a strict budget whilst paying as much as possible against the money you owe.
By far-and-away the most common debt of recent times is credit card debt. People are initially drawn in with an attractive initial interest rate; often there will be no interest at all for a set period.
The trouble is unless you start paying for this debt immediately by means of a monthly standing order or equivalent you’ll be charged a higher interest rate when the attractive interest expires. What’s more the interest you’ll have to pay back with likely be on the initial debt balance.
It’s little wonder then that more and more people are finding themselves in debt now that the financial climate is looking somewhat bleak.
One option is to try the snowball method of debt repayment. It’s an extremely effective approach at getting back into the black again and is achievable for most people.
The snowball uses the core principal that when you pay off one debt you apply that payment amount to the next debt. Therefore, the amount you pay on a debt grows like a snowball rolling down a hill. The snowball method has you pay all of your creditors the minimum payment, except for the creditor that you owe the least amount of money to. On that account, you pay as much as you possibly can to pay it off the debit as fast as you can.
Once the smallest debt has been settled in full you then move on to the next lowest balance and so on. This method instills a very positive approach as you actually witness the debt you owe steadily getting repaid.