Dealing with debt can be very stressful, but if you have a plan and stick to it, you can get rid of it in no time. Just make sure you are smart about it base your plan on your income. There are different options for paying off debt depending on your situation and only you can decide what the best option is for how to get yourself out of debt

Looking into debt consolidation is a good option if you want to cut down on your interest each month and you want to pay off your debt in one payment. You can lower your interest rate in most cases and plan to pay off your debt by doing a refinance or taking out a home equity line of credit. These are great options if you own a home and have a mortgage that is in good standing. It will pay your debt off of your lines of credit, but it adds them to your mortgage or home equity line of credit. You will have a higher mortgage payment each month or a long term minimum to pay off the home equity line of credit with this option, which does not get you paid off in the short time you may be looking for. This is a great option though, in many cases because it will help your credit score, it does open your lines of credit back up and it will most likely be a much lower interest rate than you were paying on the lines of credit you had before the consolidation. Just make sure you can afford the payments before getting into a situation like this because it does put your home on the line if you can’t make the payments.

Another option is to do a balance transfer or not to consolidate and just to use your current interest rate, do the math and figure out how much it will take to pay off your debt in a specific amount of time. If you do a balance transfer and you can get your interest rate down by consolidating your debt onto one credit line, you will have a promotional period to pay off all of your balance before the interest rate goes back up. If you have too much debt to consolidate onto one line you can do thing with a few to make it less payments with smaller interest rates across the board, but make sure you keep track of the promotional expiration dates for each line of credit if you have to do so. Also be aware that there is a small transfer fee for each balance transfer. The rate and promotional period you get for your balance transfer will differ depending on your credit, but you can calculate what you need to pay based on how much you owe and how much interest you will be accruing. If you do your calculations and you need to stretch the payments past the promotional period, plan to do another balance transfer a month or so before the promotional period is up, and calculate a new small transfer fee into the calculations for your payments.

This type of calculation works the same if you decide not to consolidate as well. Pick the period of time you are giving yourself to pay off your debt, for example, 24 months and calculate your interest accrued each month. Make sure not to spend any more on the lines of credit you are paying down, or it will throw off your math and defeats the purpose of setting up this schedule for yourself. Divide the total amount of debt, including the approximate amount of interest by the amount of months you want to pay it off in, and that is how much you need to pay each month in order to become debt free in that time!

A few things to check before moving forward with your plan that are very important! Make sure the payment amount you decide on is more than the minimum due each month. The credit card companies won’t care if you decide to over pay them, but they will definitely care if you under pay them. Also go over your budget to make sure these new payments fit and don’t over extend your monthly income. You are trying to fix a problem, not create a new one, by leaving yourself no money to live off of. Make sure to set a budget for yourself moving forward so you don’t end up in a situation where you have bulk debt to pay off again!