We know the struggles of finding oneself in financial hardships. If you’re stuck in a way that you’re unsuccessful in paying off your bills or have a struggling credit score, let’s make sure your life doesn’t become more of a struggle. In this article, we are going to help you understand how to get debt free. If you have taken out a future loan, such as a mortgage or loans on an automobile, and you’re carrying a certain amount of debt, here are our 8 steps to make sure your debt gets reduced quickly. Here’s to how you can carve your perfect path to financial safety and a debt-free life.
Why is Clearing Up Debts Necessary?
High debt levels can lead to low credit scores. Bad credit scores can make obtaining financial products difficult or even applying for certain jobs. According to Experian, the average FICO score in the U.S. is 714, but individuals with high debt may see scores drop below the 670 range, which is considered “fair” and can limit financial options. It’s a red flag on your resume—something that none of the companies, at least in the United States, would want to engage with. If you’re under the stress of a heavy loan that you need to pay off and don’t know who to consult with, Mountains Debt Relief can offer you debt-free options on your financials.
You can have the absolute liberty to live a debt-free life by contacting their professionals. They will guide you and also help you remove any or all debts you owe on your house mortgage, car insurance, or elsewhere.
How to Get Out of Debt?
Debt can come in many forms. You can have debts in the form of mortgages, or you can have them as student loans. In fact, as of 2023, Americans hold over $1.7 trillion in student debt alone, with an average balance of $37,338 per borrower. Then, we have credit cards and other personal types of debts. No doubt, having to pay off debts can be a stress-inducing thing. Debt is one of the major reasons why many individuals commit suicide within the United States.
In the United States alone, financial hardships are just one of the many things that strongly correlate with mental health distress. It’s a vicious cycle in which many individuals are trapped and experience a feeling of hopelessness and despair. Studies further reveal that people in debt are up to 20 times more likely to consider suicide than those who are not.
Dealing with such financial pressures is indeed a great risk to your health. If you don’t want to deal with such burdens, here’s how to be debt free in 6 months.
Realize Your Debt Situation
We know it’s stressing you, and we want you to overcome it. To begin with, start with the review process of all your loan statements. Check your bills and fully understand how much or in what quantity you owe debt every month. Also, find out the estimated amount on how much interest you are paying on the different debts you owe.
Check if you’re successfully fulfilling your monthly debt obligations. According to the Federal Reserve, the average American household pays around $1,000 monthly on debt alone. Explore the necessary expenses, and see for yourself if your income is up to par and you’re able to afford the essential bills or not. Here, you may need to take some steps to negotiate with lenders.
Talk to your lenders. See how much they are willing to cooperate.
At the same time, it also starts with securing more income. For anyone asking, “how can I be debt free?” this is a crucial step.
Plan Your Repayment Strategy
Prioritize which debts you wish to clear first. Whether your student loan is weighing up on you or is it the car loan that you wish to take off your shoulders.
Go through a brainstorming session with yourself and find out which loans are absolutely necessary for you to take care of first.
Pay it off initially and target any high-interest debt using the avalanche method. The avalanche method is a debt repayment strategy that focuses on paying off debts with the highest interest rates first. This method is designed to save you precious money in the long run, though some prefer to start with smaller debts first for motivation. It’s one of the 11 ways to get out of debt faster.
It always works best for those who are truly motivated!
Check Your Credit History
There might be some inaccuracies in your credit report, so it’s always best to check your credit rating before you start paying off your loans. You can receive your credit history for free from one of the three credit bureaus (Experian, Equifax, and TransUnion). Or you can simply pull up the file from AnnualCreditReport.com. Don’t worry, you’re entitled to have a free report at least once every year so you can pull them up from any of these locations.
Why is checking your credit history important? That’s because your credit report will help you better understand your debt situation and how it’s affecting your credit score. You will have insight into the complete number of late payments, or you can check whether you have a credit utilization ratio close to zero or something else in large amounts. It will help you best gauge the debt available to you, and you will have better information on the tasks.
Make Necessary Adjustments in Debt
Once you check your credit score, it will allow you to better gauge whether you’re equipped to pay off the lower-interest loans or consolidate your debts.
Read More: Debt Consolidation or Bankruptcy – Which is a Better Option?
This way, you will be more well-equipped to pay off your debts and minimize the interest to a considerable extent. In fact, you may consider a balance transfer offer of 0% interest from one of your credit cards to the desired location. According to the Consumer Financial Protection Bureau, some balance transfer offers provide up to 21 months interest-free. Just be cautious. If you don’t pay the balance off in full before the term ends, you will end up paying the credit card’s interest rate on the remaining balance.
Increase Payments
Whenever you get the chance, double the amount of payouts on your debt.
Most likely, you’re seeking to eliminate the heavy burden on which you’re indebted and paying off a high-interest debt. When you’re paying more than the minimum, it can speed up the time required to take out the debt. In fact, by increasing the payment amount, you will increase the overall rate at which your debt declines, reducing the total interest. This approach can help you reach a money debt-free state faster.
Reduce Your Final Expenses
Also, it’s best to cut back on unnecessary expenses.
Perform a thorough review of your regular expenses and check if there are any unnecessary expenses such as food, housing, or utilities that you need to take care of.
More often than not, you have expenses that are going into entertainment or new clothing. In fact, according to the Bureau of Labor Statistics, the average American household spends around $2,000 per year on entertainment alone. These are all additional expenses that you must reduce in order to get extra money.
All of this money that you will acquire will eventually help get you out of debt and reach your debt-free goals.
Conclusion
Achieving a debt-free life is about more than just financial stability; it’s a transformative journey toward greater peace of mind, freedom, and the chance to build the life you’ve always envisioned. Every effort you make toward managing, reducing, and eliminating debt brings you closer to a future unburdened by financial stress, allowing you to focus on the things that truly matter. Taking control of your finances isn’t always easy, but with a focused approach and the right support, it’s absolutely achievable.
If you’re ready to take that first step toward financial freedom and want personalized guidance, Mountains Debt Relief is here to help. Their team of experienced professionals offers tailored solutions to ease your financial burdens and chart a clear path forward. Don’t let debt define your future—reach out to Mountains Debt Relief today and start your journey toward a debt-free life.