Eradicating debt should always be at the top of the average American’s financial agenda. However, amidst the ongoing financial crisis, it’s more important than ever.
Consumer debt surpassed $14.3 trillion in the first half of the year. Credit cards alone accounted for more than $34 billion. For families juggling climbing balances and high-interest rates, it can be difficult to keep up.
Taking some creative precautions can go a long way for those looking to get out of debt fast. Even during a global health crisis, here are some interesting ways to reduce your debt balance in 2020.
Take Out a Loan
Did you know that extending your credit can help you pay down debt? Though it seems counterintuitive, this method can help borrowers save thousands in interest over the lifetime of the loan.
By paying off your existing debt with a loan that charges a lower interest amount, you’re essentially saving the difference. Interest accrual is the main reason why Americans struggle to get on top of debt quickly enough to break even.
Personal loans and auto title loans can offer lower interest rates than some credit cards and even private student loans. Consider contacting your local loan servicer to see what interest rate you can qualify for.
Join a Qualifying Organization
Loan forgiveness is one of the benefits offered by many nonprofit and government organizations. For consumer debt like credit card bills, opting for an opportunity that offers free room and board can give you the push you need to chip away at your balance.
Joining experiential organizations like Peace Corps, Americorps, Merchant Marine is a popular way for indebted individuals to minimize their lifestyle expenses and apply more focus to their credit card statements.
In some cases, opting for employment through a non-profit or other qualifying organization can also make applicants eligible for repayment assistance through participating programs.
Rent Out Your Space
Do you own a property, parking space, or even a storage unit? You could make money passively by renting out your unused areas.
Using apps like Airbnb and Craigslist, people looking for extra storage or short-term housing have a quick and easy way to browse available rooms, parking spaces, bed and breakfasts, and even couch surfing.
If you have an extra room or even a spare bed, you could collect a few hundred per month to put towards outstanding debt.
Just make sure to check with your homeowner’s or rental agreement to confirm that subletting is legal and authorized where you live.
Leave the Country
This option is a bit more extreme, it’s a great way to make a drastic change and pay the debt off in record time.
In many cases, working abroad allows expats to earn tax-free money that can then be used to pay off consumer, student, and medical debt.
Teaching English, working in medicine, or even tending to a farm could be enough to secure a foreign visa in the country of your choice. By opting for a country with stable earning potential and a low cost of living, you can shift your budget to prioritize debt management instead of your daily expenses.
Paying off debt doesn’t have to be as scary as it sounds. By making a few small shifts to your daily routine, you can make a significant impact on the amount you owe. If you’re willing to change your lifestyle, you can make your money stretch a lot further.