If your total credit card or personal loan balances are $25,000 or higher, then chances are good you are paying hundreds of dollars every month in interest! So what can you do about it? More than you might think. We’ve listed three surprising ways you can pay off $25,000 in debt.
Depending on your interest rate, it could cost you $500 or more just to make minimum payments. Also, it could take you decades to pay off the principal. While making minimum payments will keep you in good standing with the creditor, have you ever wondered why?
Creditors Make Huge Profits on Minimum Payments!
Creditors love minimum payments because it makes them a lot of money and keeps you paying them as long as possible–often doubling or tripling the debt in the process.
When you make minimum payments to your creditors:
- Only a part of your payment goes toward the principal balance
- It can take decades to pay off high balances
Only a part of the minimum monthly payments goes toward paying the principal balance. Instead, hundreds of dollars go toward interest charges which creditors collect as profit.
3 Surprising Ways to Pay Off $25,000 in Debt
Luckily, you don’t have to settle for an endless cycle of debt. There are ways to pay it down that can help you get out of debt faster and for less money.
Debt Resolution
Debt resolution programs help you negotiate new terms with your creditors so you can pay off debt for less than the balance owed, including any interest and fees accrued.
When you start a program, you delay direct payments to your creditors and instead make monthly deposits to an FDIC-insured account in your name that you own. Meanwhile, debt specialists negotiate with your creditors
How it works
A debt specialist will contact your creditors and negotiate new terms that reduce the amount you owe.
They’ll explain to your creditors that once they agree to the new term, you’ll resume paying them.
Why choose this option?
- Significantly reduce total debt
- Consolidate multiple payments
- Pay off debt in 12 to 48+ months
Negotiate New Interest Rates
This method works best for credit cards. If you have a strong history of on-time monthly payments and your credit score is healthy, you maybe be able to ask for lower interest rates.
Credit card companies don’t want to lose your business, especially if you are in good standing with them. Comparing your current APR, grace period, statement due date, and current balance to options available from competitors can be used as leverage with your credit card company.
How it works
You can call your credit card company directly and ask them to lower your interest rate.
Be prepared with information about your current credit card terms and use this knowledge to your advantage as you reveal what you’ve found when researching competitor lenders.
Why choose this option?
- You have credit card debt
- Pay off the principal balance faster
Debt Consolidation
If you qualify, you can pay off and consolidate existing debt with a new loan that has a lower interest rate than current accounts. Paying off a new loan with a lower interest rate will save you money and help you pay off the principal balance faster.
How it works
You apply for a loan for the amount you owe on your existing debts, and once approved, use the funds to pay off your debt balances. Then you’ll pay down the new loan over time.
Why choose this option?
- Consolidate multiple payments
- Reduce monthly payment
- Pay off the principal balance faster
Top Company for Paying Off $25,000 or More
Debt Resolution
✓ Lower Monthly Payment
✓ No Credit Score Limit
✓ Debt-free in 12-36 months
✓ No fee to apply
✓ A+ Rating with BBB
What Debt Payoff Solution is Right For Me?
The right solution to pay off your debt will be unique to you and your needs. Do you have poor credit? Is getting out of debt fast your top priority? Asking yourself these important questions and talking to a Certified Debt Specialist can help you decide which path is right for you.
