A resolution that every American should tackle in 2013 is to get out of debt. Predictions for the coming year run the gamut. Some financial analysts are expecting a stagnant or slow economy due to mediocre job growth, while others are more positive in their outlook for 2013. But without a crystal ball showing the future, there’s just no way to be certain. One thing is for sure, no matter how you view the future or where you stand on why our nation is struggling with so many economic problems, you’ll be in a better position to deal with whatever the future holds, if you improve your own financial portfolio.
U.S. Citizen Debt
As a society, Americans in the private sector are in debt for more than $11 trillion. And while it’s true that all that borrowing helps to stimulate the economy, American households are seriously strained to the point of potentially defaulting. Just consider that the average household has nearly $15,400 in credit card debt as of November 2012, and the dream of owning a home is putting the average citizen under a burden of debt just short of $150,000. Perhaps the most troubling statistic is that of the generation preparing to lead the country into the future averages student loans of slightly more than $34,000.
It may be a daunting task for anyone struggling to make ends meet with a mortgage on a home that has lost value in the last few years, multiple car loans, college expenses, installment or personal loans and massive amounts of credit card debt to find ways to lessen their staggering burden of debt. But there are steps you can take to reduce your debt with the ultimate goal of becoming debt free.
Without access to the funds necessary to simply pay off the debt, the best way to begin the process of reducing your debt is by lowering the interest rate you pay for the privilege of borrowing. How you go about requesting a lower rate will depend on what type of loan it is.
Pay Less for Your Mortgage
Qualifying for refinancing requires a minimum of 20% equity in the home. Give your current lender an opportunity to quote a lower rate by giving them a call and requesting a review of your account. If they can’t or won’t help, there is plenty of competition that may be able to help lower your payment.
In either case, an appraisal of your home may be required and your financial records will be examined thoroughly to conclude your credit-worthiness. Use one of the free online mortgage calculators to compare mortgage rates and terms to help you decide which company will save you the most money. If you can scrape up some money to put down when you refinance, it may pay off in a big way. By lowering the principle, you may get a lower rate and have fewer years to pay it off.
If you opt to apply elsewhere, there are two convenient ways to compare a variety of mortgage companies. Either use the services of a mortgage broker to find the best company or take advantage of the convenience and ease of using the web. When visiting their websites, compare important facts for each company, including interest rates, points, fees and other terms. There is no obligation to apply using an online application
Lower Your Credit Card Interest
The decision to lower the interest on a credit card account is subjective and at the whim of the bank. But this doesn’t mean you don’t have some pull in getting them to lower the APR. For most people, a simple phone call will result in a lower rate. Mentioning a better offer available from one of their competitors may be the key to a lower rate, especially when you have a history of on-time payments and an excellent credit score.
Easing Bank Loan Payments – Auto Repairs, Medical Bills, Home Improvements, Student Loans, etc.
When you’re juggling multiple loans, it’s not unusual to get confused and make more mistakes like paying late. Consolidating these obligations under one loan is a smart way to get out from under high interest balance. It requires filling out a simple application; approval often comes within hours. With fixed terms, rates and a set payment date, you’ll be simplifying the payment process and making it easier to stick to a budget and more able to make broader strokes against the premium.
Every step you take to lower the interest of your credit and loan accounts brings you one step closer to becoming debt-free. Stop adding more debt and learn to live within your means by changing destructive habits. Never allow loyalty to a company or brand, keep you from transferring your balances to save money from lower interest and fees. Be patient and persistent in pursuing your goals.
Noreen Ruth is a regular contributor to a variety of financial-related blogs and websites. She specializes in credit and debt-related issues and enjoys educating consumers about the latest rules and regulations, as well as ways to build, improve and maintain good credit. If you’re interested in additional information and comparisons of balance transfer credit cards, Visit www.asapcreditcard.com or follow her regular posts on the ASAP Credit Card Blog.