How to Find Money to Pay Off Debt Quickly And Stay Debt Free Completely

Many people find it difficult trying to pay off debt because they cannot find sufficient money for all their creditors and debts. To make a significant progress towards completely paying off your debts, you need do more than just the monthly minimum payment. This can be difficult unless you get a pay rise or win the lottery and get a sudden windfall. However, most people with debts are already having trouble making ends meet each month after all the numerous deductions for debt payments and they do not have much left of their pay check.

So are there some easy ways to find additional money to pay your credit card debts, mortgage and car loans every month? Here are several ideas which have worked for many people.

Use Your Yearly Tax Refund To Repay Car Loans
If you have a substantial amount of tax refund every year, consider applying all or at least 50% of this tax refund towards paying off your debts. Make sure to readjust your withholding such that less taxes are withheld from each check since doing so allows you to have more money to pay off debts every month. This does not really affect you as you probably only end up with lesser income tax refund and definitely there is no need to give the government an interest free loan when you have seriously high interest credit card debts to repay.

Use Excess Bank Savings And Investments To Clear Off Debts

If your bank savings and liquid investments are worth more 6 months of your required monthly expenditure, we do recommend you to withdraw the surplus for paying off your high interest debts. If you are concerned about the returns on your investments, it is quite tough to consistently beat the 18% APR charged by your credit cards. The more you delay this, every month you end up paying more interest of your debts and lets not forget that your investments are not risk free and you can also lose money on them. Why not use them to eliminate some of your small debt accounts that will 100% for sure save you some money starting from next month?

Earn More Income With Overtime, Part Time Or Temporary Work
You need to look for opportunities to make more money and unless you have a lot of savings for investment leverage, most of us still have to use our time for extra work. Sacrifice some of your leisure and hobby time and take up all the overtime work available, since these pay extra over your regular hours. You just need to endure for a few months to earn the extra money to pay off debts quickly and you can get back your own life soon enough. If you get a pay raise or your get your bonus pay check, do not spend it all giving yourself a treat. Use it to get rid of one or two of your smaller debt accounts to give yourself more breathing space now after.

Sell Unwanted Stuff To Raise Money For Debts
Look at all your possessions and see if there are any items you no longer need and is just taking up space in your house. Hold a garage sale or auction them off on eBay, Half.com or Craiglist. Old books, CDs, watches, sporting memorabilia are some examples that can be sold to find extra cash for your debt repayments.

Borrow Money From Family And Friends
Unless you are a perpetual borrower, family and friends will be most willing to help you settle your debts with a personal loan. Do not let your pride get in the way, when it is clear that you cannot pay off the debts with your own income. You can get it done properly by writing up a loan agreement or IOU that clearly states the amount of money you have borrowed from the other parties and the repayment schedule so that there will be no disagreements or hard feelings in future.

Borrow Against Your Home Equity For Cash To Pay Creditors
For homeowners, you can consider borrowing cash against your home equity at a lower interest compared to your other high interest credit card debts. This means that you pay off all your miscellaneous debts using the money from your home equity and is left with a single big debt secured by your house. Yes, this is a high risk option because you can lose your house when you default on the future repayments for any reason. If you have a very stable income and have exhausted your bank savings and liquid investments to erase your debts, this can be a viable way to find money for paying any remaining owed money. We suggest you to borrow only up to 50% of your total home equity and have sufficient bank savings for at least 9 months of family expenses and repayments for this loan. You will not want to lose your home in return for getting the money to pay your other debts.

Reduce Spending And Shopping Trips To Save Money
Finally, change your lifestyle and cut down on luxurious spending. While we cannot easily raise our income, most of us have a lot of unnecessary expenses that can be eliminated every month. Eat out at classy restaurants less often, spend less on entertainment such as clothes, bags, watches, make less holiday trips etc and you can suddenly find up to 30% more cash every month to pay off your credit card debts. Most importantly, stop charging new purchases to your credit card and buy only when you have the cash for it. Otherwise, how are you going to finish paying off your debts completely if you keep adding new debts under your name?