5 Tips for Paying off Debts with High-Interest Rates

It is highly likely that an individual can face financial difficulties at any point in their life. In such circumstances, they may turn to take out loans to help them during troubling times. However, when they are unable to pay off their debt, they are given higher interest rates that make it harder for them.

If you are stuck with paying high-interest rate debts, isn’t it such a drag? If you don’t have a hefty sum of cash to pay off your debt now, you have no choice but to repay your debts religiously. Seeing that you’re already dealing with high interest, missing a deadline can make that rate skyrocket again. 

If you want to know how to pay off high-interest-rate debts, here are five tips to do so: 

1. Put away your credit card

Because your credit card is easy to use, it also becomes easy to overuse it, and next thing you know, you have accumulated a large credit card debt. When you’re trying to pay off debts, put away your credit card because you wouldn’t want to incur any more additional debts. Pay off your debts first before you swipe your card again. If you have to use it, however, make sure to use it on the necessary items only. 

2. Understand how much you owe

It’s easy to forget how much debt you owe, or the interest rate that you’re paying. Every time you use a credit card or pay off a debt, track it down because it’s important that you know where your money goes. Additionally, it will help you identify where and when you’ll be short on cash so that you’ll be able to come up with alternative ways to avoid missing a payment deadline. 

3. Pay off debts with high-interest rates first

Eliminate the debt with the highest rate first because they can become a major pain point. The earlier you get rid of them, the less you will have to worry about. Pay as much as you can toward the debt every month until you have zero balance. You can still pay the minimum for your other debts, but ensure that you put more focus on the debt with the highest interest rate first. 

4. Request for a lower interest rate

Know that some lenders are willing to negotiate their interest rates––you only have to ask. It won’t hurt to ask your creditor, especially if you find yourself already in a rut. However, lenders usually favour those who have good repayment history. If you’ve been diligent in paying your debts, then you have a bigger chance to have your interest rates lowered. 

5. Pay as much as you can

If you get extra money from your savings or from doing a side job, use it to pay off your debts. Pay as much as you can because the earlier you repay your debts, the better it will be for you.

Paying off debts with high-interest rates can be frustrating, and in some cases, it can even put you in more debt. Don’t let this happen to you by following the tips listed above and you can guarantee that you’ll be debt-free in the nick of time. 

Keep in mind that being responsible with your finances, including your debts, will help you rise from troubling circumstances. Be patient and adapt efficient and stricter spending habits, and you’ll be able to stay away from unwanted debts. 

If you’re looking for personal debt relief solutions in Canada, get in touch with us today! We’re happy to help.