Getting Out of Debt

What's the best way of getting out of debt? Are you confused about all the different debt solutions available?

You're definitely not the first to ask themselves that. Finding the best solution to get rid of debt can be tiresome and overwhelming.

While it's extremely easy to find information on all the debt solutions available to you. Getting the straight facts about debt consolidation loans, credit counselling and other debt financing options is NOT so simple!

If you're in debt and considering options such as a debt consolidation loan, credit counselling or restructuring your mortgage to include some or all of your debt...READ on!

Something to think about before getting that consolidation loan

At first glance a consolidation loan seems like a very good solution for getting out of debt.

• First of all, it merges all your debts into one, leaving you with one payment instead of several individual payments.

• Second, you usually end up with a lower rate.

• Third, your payments are less too...

So how is this a bad thing? As Dave Ramsey so eloquently puts it in his book The Total Money Makeover Workbook, "It's a short-term, feel-good solution that really creates a longer-term problem!"

Banks and other lenders CON you into borrowing more money with attractive incentives like lower payments...but what they don't tell you is that the term of the debt is now longer than it was before. Essentially you are just going into debt for a longer period of time.

Any financial expert will tell you that getting out of debt by borrowing is just perpetuating the debt. In other words, you'll never truly be debt free if you continue to borrow more money to get out of debt - you're just spinning your wheels. Unless you win the lottery or inherit alot of money there is no fast track for getting out of debt - your better off paying your debt off one paycheck at a time.

Ask yourself "Who REALLY benefits from this loan, ME or the BANK?"

Answer: the BANK...only one thing makes a bank tick and that's profit. That's the cold-hard truth, regardless of what your personal banker says.

Why slow and steady wins the race

When it comes to getting out of debt the best way is ALWAYS the slow and steady approach. There are no quick and easy shortcuts when it comes to getting rid of debt.

The only TRUE way of getting out of debt is by paying off your debts one at a time - ON YOUR OWN! This means no borrowing from the bank or any other lender - this will only prolong your debt. The only exception is taking advantage of low introductory rates - but make absolutely sure you read all the fine print before applying!

Use the Snowball method to pay down debts using your own money - make it your #1 priority. You will benefit greatly by getting out of debt faster and you will have paid far less interest in the long run.

Bottom line, weigh all your options very carefully. Crunch the numbers - you'll probably find that the BEST and most economical way out of debt is through careful budgeting and a well developed debt repayment plan.

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