How to Become Debt Free: The Best Method

[Jasmine]

Let’s say you have a home loan, car loan, student loan, and credit card loan. So, how do you start paying loan when you have limited income?

So, first of all you need to make a list of loan from highest to the lowest. For example, your home loan might stand highest and your credit card loan might rank lowest.

What you need to do is you pay minimum due for all loans except your lowest loan which is credit card in this case.

Once you have paid off your credit card loan, you can use the money you used to pay credit card to pay your another lowest loan which could be student loan, or a car loan.

Paying off your credit car loan first makes sense because once you pay your entire loan, you can start using it again and get a new interest free payment term for 30-45 days. By using this method, you can become debt free.

 

[Mika]

There are numerous ways to become debt free.
Never get into debt no matter what:
Pay your smaller debt first, and then focus on bigger debts
Pay high-interest loans first and once you clear your loan, start paying a low-interest loan
Never buy liabilities with your loan
Always use your loan to invest or buy assets.
Don't spend money on nonsense things like going on a vacation, buying luxury items, etc. when you already have a huge outstanding loan.
Cut your living cost. If you can save money on rent by moving to a smaller home, don't hesitate to do that.
Instead of buying packaged food, or dining out, start making your own food and save money on food bills.
So, basically, in order to pay your debt and live a debt-free life, you need to cist your expenses When you cut your living cost, you can save a lot of money and you can start paying your debt.

 

[Abigael]

Being debt free is a very good goal that every individual should focus on. If you are stuck in loans, it is best to look for ways that will get you out of it.

Having so many unpaid loans lead you to so much financial anxiety, instability and inability to afford most of the things that you need. That leads to so much mental health issues such as stress and depression and in turn, you risk deteriorating your physical health.

Getting out of this loan mess requires that you first find ways to make money. If you already have one, then you might need to look for ways to earn extra cash. This is because you will need so much money to afford your daily basic needs and still have some money to pay back loans.

Then make a plan on which loans are the most important to pay first. This is by looking at the interest rates, repayment dates and the amount.