Important ways to pay off debt

There are certain important ways to pay off debt if you want to get rid off your debts. In this high consuming economical time you can not carry your life with high debts. Here are five important ways to pay off debt.

1. Pay more than the minimum: When you required to pay some amount of minimum payment on your credit card is $100, you can pay a payment of $150 or $170, the extra amount of payment goes under the name of principal. This may not show you big difference but as the period comes to an end you have to pay very less amount since you have been paying some amount of principal along with interest.
2. Transfer high rate balances to lower ones: Any scope on your lower rate credit cards, transfer higher rate debt to lower rate. You can save money by doing this. You have to pay more attention on your high rate debts.
3. Raid your savings: Your savings account may not fetch more interest for you on your balances. But if you use your savings for pay off the credit card payments, you will effectively getting a higher rate on the money. If you open an account in the bank as a “rainy day” account and keep some of the credit lines open to use your account amount in the emergency cases.
4. Cash out or borrow against life insurance: If you have a insurance policy, you can borrow some money against your policies and it can be used to pay off your loans. In future also once the period is over, you can cash it out entirely as you do not need security of the insurance.
5. Renegotiate with your creditors: Some times creditors can realize that all the debtors may not pay complete loan amount. So they settle the risk loans with 75 to 80 % of the whole amount.