Once you’ve mastered the tried-and-true basics of debt reduction, these additional management strategies may prove useful.
Think it through
When first borrowing, remember that credit card interest rates are usually higher than loan interest rates. If you want to make a substantial purchase, research your options and consider a loan over charging it to credit.
Drive for Uber, pet sit through Dog Vacay, do odd jobs through Task Rabbit to supplement your income. If you own your home, renting a room through Airbnb can generate the funds you need to help pay off your loan.
Consider buying clearance items or garage sale gems to sell online for a profit. Websites like TheSellingFamily.com can also help you cash in by selling stuff on Amazon. There’s risk, of course. Fail to sell at profit and you’ll compound your debt rather than reduce it.
Talk to the Feds
If you need extra help managing debt, you can turn to the government for free guidance. Consulting the Department of Education and the Better Business Bureau might be good places to start.
Consider your options
Personal loans let you borrow without collateral, which is why they come with high interest rates. If you default, you’ll be labeled high-risk, your credit score will be severely impacted and the lender can take you to court, but defaulting cannot result in assets seizure. If you’re really in deep, only consider bankruptcy as a last resort. Declaring bankruptcy can help you start over with a clean slate. But it will take a long and serious toll on your credit profile. Your personal financial life will become open to public view. And you may have to put off buying a new home for years. Declaring bankruptcy is serious business.