Debt Repayment …You Have Two Options

If you find yourself struggling with debt, there is a way out. The battle can be won, but it will take some work on your part.

Below you’ll learn some steps you can take to pay off your debts and start the road to freedom.

The funny thing about debt is that getting a loan seems wonderful at the moment, but from the first payment on it’s dreaded. This is because most decisions to get a loan are made on a whim without thinking it through to the years ahead. If every time you consider getting a loan you could think about every future payment that will come, you might never get another loan.

The Debt Solution

The only way to solve your debt problems is to get yourself out of debt. This can seem impossible, however, people are gaining control and getting out of debt all over America. I think the reality of debt and repayment is settling in on many families, and they’re willing to do just about anything to get out of debt – even if it means eating beans and rice at every meal for a whole year! You can get free from your debt. Are you willing to do what it takes?

The Obvious First Step

Obviously, the first step you’ll need to take in order to get out of debt is to put the brakes on borrowing for your family. Make a rule that states, “From this point forward, we will not use credit cards or take out any other loans!” If you don’t resolve to stop going into debt, your vicious cycle will never end. You can’t pay off debt if you continue to add to it. You’re defeating yourself.

The Two Options to Get Out of Debt

1. Sell, Sell, Sell

The first option you have is a quick way to get out of debt. Sell any assets you own to pay off your current debts (or as many as possible). Perhaps you have a couple of large items you could sell such as the old car you’ve been working on for six years that’s sitting in the back yard, a boat, a storage building, television set, stereo, etc. Look around the house to find things of value that you really don’t need. You can get those things later when you’re on your feet and able to pay cash for them.

The purpose of doing this would be to pay the lump sum off for certain loans, particularly loans with high interest. For example, your loan payoff balance is £3000. You sell a few items for £3000 or more. If you pay the loan off, you’ve just eliminated future interest, so you’ve accomplished two things. You no longer have the debt’s monthly payment, and you saved money on interest. In some cases, you might be able to sell items that are still carrying a debt to break even or find someone willing to take on the payments for NO PROFIT. Another quick way of paying of your debt if you are a home owner is through remortgaging to release equity. If you ave equity in your property it may be beneficial to remortgage and use the equity to pay off high interest debt. This will increase your mortgage payments but if the increase is less that your debt it will prove to be a good move.

There are many ways to accomplish this if you have assets. Before doing this, think it through. Be sure it makes sense to sell certain items. For instance, if you own an item of great value that will appreciate over the years, like an antique or something similar, you might not want to sell it. Figure the possible future value of the item, and whether saving the interest will be worth it.

2. Repayment of Debt the Old Fashioned Way

If you don’t have assets to sell and pay off your debts or not quite enough, the only other option you have is to make monthly payments until the debt is depleted. This takes a while, of course, but at least you’ll know you’re making an effort toward getting out of debt.

The schedule below gives an example of how you can set up your debt repayment..

Create a chart which includes the following columns and rows. Of course, you’ll customize this to fit your own personal debts. You might not own a credit card or a personal loan, so adjust accordingly.

Column Across: Balance Due/Interest Rate/Pmt. Per Month/Pmt. Until When

Row Down:


1. Charge Card 2. Personal Loan 3. Life Insurance 4. Auto Loan 5. Parents Have Loaned You Money 6. Furniture Loan 7. Department Store Loan 8. Medical Debt 9. etc, etc

On your chart, for each debt you will include the balance due, interest rate amount for that debt, monthly payment amount and date of payoff.

Some loans might not have a set monthly payment, like the one from your parents. However, you can set an amount to pay them each month, even if it’s only $20 per month until you get other debts paid down, this will help both you and them. The commitment is what counts.

If possible, try paying extra each month on your high interest loans to get them paid off quicker. This will save interest in the long run. If not possible now, keep an eye on your debt schedule for payoffs, and use the additional money to double up on another loan payment anytime you come to the end of a loan.

Once you have all of this written down, create a total at the bottom for balance due and monthly payments. This will give you an idea of exactly how much total debt you owe and what it will take each month to pay it off. You can include this in your monthly budget. Stick to it. You will see your debt melt away month after month, and this is a great feeling!