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Should you respond to Coral Funding, Neon Funding, or Credit 9 and trust them that this is the best way to pay off $10,000 in debt? If you have been thinking about it and you just received a “too good to be true” loan offer in the mail from Neon Funding, Cobalt Advisors, Saxton Associates, Hornet Partners, Piper Funding, Polk Partners, Ladder Advisors, Apply Credit9, Cambridge National Lending, Greenlink Financial, Americor Funding, or Titan Consulting Group – listen to your gut instinct. Do you really think you qualify for a 3.99% interest rate? Do you really think that reservation code is especially for you? Check Best 2020 Debt Reviews and find out the truth.
How much debt do you owe? Is your ballooning debt making you more worried than ever?
As soon your debt goes over $10,000, you’re no longer in control: struggling for a good way to get out of credit card debt for things that aren’t longer in your possession. Besides, you lose access to the seed money that intended to fuel your investment ambitions and allow you to become financially independent. Still, there’s light at the end of the tunnel. Follow these three steps and pay off $10,000 in debt with ease.
1. Get It in Writing
Before choosing the best way to consolidate debt, the first step to pay off $10,000 in debt is to open an Excel spreadsheet and make the columns for the following:
- How much debt do you owe?
- What are your minimum monthly payments for each debt?
- How much interest do you pay towards each debt?
- If you have a mortgage with an adjustable rate or a credit card with a promotional rate, specify when the rates are expected to change.
Here’s what your debt list should look like:
- Personal loans
- Vehicle loans
- Student loans
- Home equity loans
- Credit cards
- Loans from family members
- 401(k) loans
- Payment plans for the mechanic, veterinarian, doctor, etc.
Note the sum of all these loan.
2. Choose a Killer Debt Plan
Next, you create a debt repayment plan to pay off $10,000 in debt. Go back to the last step and prioritize your loan .i.e. decide which ones do you think should be cleared before others. You can follow two methods to make this decision.
- Debt Killing Method #1: You can arrange your loans by their interest rates. Prioritize the one with the highest interest rate and pay it first. This method is ideal for those who are looking to save as much as possible.
- Debt Killing Method #2: You can also order debt in terms of their balance. Pick the loan with the least amount of balance and focus on reducing it. This strategy can keep you motivated because you close more debt in less time.
3. Apply Pyramiding
Lastly, you are going to use a strategy, which is popularly known as pyramiding. It directs all the efforts on a single debt and then moves down to knock our balances one-by-one. Pyramiding is quite effective when it comes to paying off $10,000 in debt.
Your pyramiding strategy depends on the method you used in the 2nd step. You can focus on paying the minimum amount to all the balances and contribute the most to the debt with the highest interest rate.
Or you can simply pay the minimum amount to all balances and concentrate on the debt with the smallest balance. Over time with regular payments, you can get rid of a certain debt. Next concentrate on another balance and repeat the approach.
How to Boost the Pyramid Growth?
Pyramiding offers benefits, but they are more psychological than tangible. It directs your attention to an effective game plan and shows excellent results in a short period. It makes you believe that you can pay off $10,000 in debt.
Pyramiding is certainly better than your previous approach: Putting small amounts equally to all debt without enjoying any major benefit. Pyramiding is instant: it pays off your balances and gets your debt disappeared steadily.
Pyramiding can only work if you have extra cash that you can redirect to a specific debt. So much extra cash are we talking about? Well, you can start with $200. It can ensure that your debt repayment plan ends up being successful.
Reach the $10,000 Mark
Paying off $10,000 in debt may seem tough, but it’s within the realms of possibility.
However, if you don’t earn much, then it can be hard for you to pay off $10,000 within a year. Let’s see how it is possible
If you are targeting $10,000, then you are likely to pay $900 in a month. A large sum of this money is already being paid via monthly payments. While this money does reduce the principal amount, it’s also used to pay interest. Get your account statements to check the breakdown of your monthly payments .i.e. how much money goes to the principal amount and how much goes into the interest.
Note the total current monthly principal payments and subtract it from $833. For instance, if $440 of your money goes to principal payments, you need to generate another $460. This can ensure that you meet the $10,000 target within 12 months.
There are several approaches to come up with extra cash:
- You can get a new job. If possible, consider brushing up your IT skills and work remotely. A remote IT career helps you to get more money in fewer hours.
- You can sell unneeded, but valuable stuff.
- Save money. Review your current spending and see if it’s possible to curb down spending. For instance, you might be paying too much on electronics.
There are countless other ways to generate more money. Get in touch with us to unlock the secret of making extra money.
Download a budgeting app from the App Store or Play Store. Many people rely on these apps to create and manage their budgets.
Similarly, you can also consider if you can get some credit card relief or even with your other existing debt, such as student loan or tax debt.
Don’t panic. By saving money and finding a passive income stream, you can easily generate $460 or more to work on your debt pyramid. Hence, paying off $10,000 in a year is doable. Also, remember with the current COVID-19 situation, you can sign up for different relief programs when it comes to debt. Consider getting help from financial help and you might get lucky in eliminating some of your debt permanently.