Tips to save money on paying debt
(STATEPOINT) Over extending oneself on high-interest rate revolving debt purchases is not uncommon. Indeed, U.S. households who use credit cards have an average of $15,799 in credit card debt, according to the non-profit Consolidated Credit Counseling.
“If you’re not strategic about the way you make repayments, you could end up spending more paying down your debt, and at rates that may increase over time,” says Stephanie Cutler, vice president of Wells Fargo`s Personal Lines and Loans.
If your high-interest rate revolving debt seems overwhelming or stressful, Cutler says to consider the following:
Juggling multiple high-interest rate debts can be costly and confusing. With a personal loan, which often comes with a lower interest rate than what credit cards offer, consumers can take funds from the loan and pay off high-interest rate revolving debt, maintaining one monthly payment at a potentially lower interest rate. Additionally, some personal loans are offered with no origination or prepayment fees, which can help save money in the near- and long-term.
Personal loans from Wells Fargo, for example, require no collateral to qualify and credit decisions can be made quickly. The bank can even pay off creditors directly, giving customers an opportunity to begin paying down debt on better terms right away. With loan amounts from $3,000 to $100,000, customers can customize the loan based on the amount needed, and loan terms up to five years.
“Rolling your debt into a single loan won’t immediately reduce your debt, but it does offer a single predictable monthly payment,” says Cutler. “Plus, having just one bill can make tracking and payments easier.”
With what you may potentially save on monthly interest payments over time, you can increase your cash flow, savings, or pay down more of the loan’s principal balance to see your debt shrink even faster. (Incidentally, personal loans are also a way to finance a major purchase, unexpected expenses like home or automotive repairs, or even medical expenses.)
To calculate how a personal loan may save you money, visit wellsfargo.com to use their free Rate and Payment Calculator. More information about Personal Loans can be found at wellsfargo.com/personal-credit/personal-loan.
While consolidating debt, don’t forget to adopt and maintain savvy spending habits. Be sure to keep track of where your money is and how you’re spending it. Use budgeting tools online to display deposits and spending by category. This information can help you spend smarter and increase what’s left at the end of each month to direct toward payments on your loan principal.
“Even a little extra can go a long way to paying down debt sooner and less expensively,” says Cutler. “Consider setting up online automatic payments from your checking account to make the process simple and stress-free.”
To pay down credit card debt, consider all your alternatives with your lender and your personal spending habits.