Find the Best Ways to Pay Down Debt

Debts can be concerning. But you do have some ways of gaining control of your debt situation.

First, know your debts. Create a list that includes your mortgage, auto loans, student loans, credit card debt and any installment purchases you’ve made.

Next, look for ways to restructure your debt. For example, you could transfer credit card debt to a new card with a low introductory rate. You could also swap debts, possibly by using a home equity loan to pay off higher-rate unsecured loans.

Your next step: Determine how much money will go to debt payments. You must make at least minimum payments to avoid fees and penalties, but beyond that, you’ll need to decide whether to pay more on your debts or use the money for other goals, such as saving for retirement.

Finally, if you can make extra payments on your debts, decide how you want to do it. You could tackle the debt with the highest interest rate first or you could go after the smallest debts to get them out of the way.

Debt may be a fact of life — but if you manage it wisely, life can be a lot less stressful.