4 Helpful Tips to Pay Off Debt in 2023
4 Helpful Tips to Pay Off Debt in 2023
Posted on July 8, 2022
Paying off expensive debt is key when trying to finance a car loan. organization is key and time is not on your side unless you can wait for the new car, so approaching debt in a logical, structured way is essential.
Our Freelton auto loans team walks you through the process of paying off expensive debt in time for an auto loan. You can use them for simply paying off debt too, the end result is the same!
Get your debts in order
If you already have a household budget, add an extra column after income and outgoings for debt. Order all your debts in order of interest rate with the highest at the top.
This is the debt you’re going to prioritize. By paying off the highest rates first, you’re ensuring as much of your payment as possible go towards the debt and not the interest.
Balance transfers for credit cards
Credit cards are the most expensive debt most of us carry. If cards are top of your debt list, paying those off first is essential.
To help with that, find a cheap balance transfer credit card and transfer all your card balances to that. Prioritize paying it off during the 0% period to reduce it as much as possible.
Watch for balance transfer fees when shopping for a card. Some can work out quite expensive!
Then, when the interest free period is almost up, find another balance transfer card and switch your balance to that. Rinse and repeat until your cards are cleared.
Make some savings
Are there items in your everyday budget you could live without for a few months? Temporary cutbacks in spending that you could make to help accelerate paying off debts?
If so, make them.
Winter is easier to make savings than summer but it’s possible to make savings at any time of year. Reduce eating out, don’t stop by the bar after work, make your own coffee, make your own lunch, stop those subscriptions you don’t use, eat basic foods for a couple of months or cut back on going out with your buddies.
Whatever you can do to reduce your outgoings and live with for a couple of months or more, do it and put everything you save into paying off debt.
Consolidate your debt
If you have lots of debt across multiple accounts, you could consider consolidating them all into one loan.
If you’re planning a Freelton auto loan, borrow more to pay everything else off and you’ll only have one outgoing per month instead of multiple outgoings.
As long as your credit score is sufficient and you can afford the repayments, this can lower the overall cost of your debt but also make life easier to manage.
We all have debt of one kind or another. It’s a part of life and something we just get used to. That’s fine if everything is manageable and you’re making payments but not so good if you’re planning a big purchase.
We hope this advice helps you in whatever situation you find yourself in.
If you need help or advice on anything to do with auto loans in Freelton, contact Car Nation Canada today, we can help!
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