How to Reduce All Debts
- 1). Call your lending institutions and discuss ways to reduce your interest rates and organize more workable payment plans with a representative. Some lenders offer alternative monthly payment plans, and interest rate reductions are sometimes applied to customers who have made timely consecutive monthly payments. Refinancing options are offered by some mortgage lenders, and many private and federal student loans can be consolidated into one debt with a fixed interest rate.
- 2). Prioritize multiple debts by determining which debts have the highest interest rates and which debts offer the least payment flexibility. Begin making payments on the higher priority, higher interest debts which deny you the flexibility to declare periods of temporary financial hardship.
- 3). Reduce or eliminate unnecessary monthly variable expenditures. Variable expenditures include those that can be easily modified, such as dining out, entertainment expenses and vacationing. Sending emails or using Skype instead of making long distance phone calls, preparing and eating meals at home and walking short distances rather than driving are all effective ways to reduce monthly expenses.
- 4). Use credit cards only when absolutely necessary such as for car repairs or medical emergencies. Avoiding the use of credit cards for nonessential items such as designer clothing and electronic gadgetry goes a long way towards avoiding further debt.