Paying off debt can feel overwhelming, but the good news is that there are a number of effective tools out there to help you reduce and eliminate your debt faster. While traditional methods like budgeting and debt snowballing are popular, there are several lesser-known tools and strategies you might not be using yet. Here are some of the best Debt Reduction Tools to consider to eliminate your debt faster.
1. Debt Payoff Planners and Calculators
So, online debt payoff calculators are a great resource to visually track your progress and determine how long it will take to pay off your debts. Some platforms even allow you to experiment with different payment strategies (like the debt snowball or debt avalanche method) to find the most effective route for you. Many of these planners also include reminders, which can keep you motivated.
Best Options:
- Undebt.it: A flexible tool that helps you create a customized debt payoff plan. It allows you to use different strategies, like snowball or avalanche, and shows the impact of extra payments on your debt-free date.
- Debt Free Calculator: A simple tool that lets you input your debts and monthly payments to calculate the best strategy for paying them off.
2. Debt Consolidation Apps
Debt consolidation allows you to combine multiple debts into one with a single monthly payment, often at a lower interest rate. There are now apps that can help you find the best debt consolidation loans or even assist with managing existing loans.
Best Options:
- Marcus by Goldman Sachs: Offers personal loans for debt consolidation at competitive rates. The app also has no fees, and its calculator helps you estimate monthly payments.
- SoFi: Offers personal loans for consolidating debt, along with a user-friendly app that can track your progress and even offer financial advice.
3. Balance Transfer Credit Cards
If you have high-interest credit card debt, you might want to consider transferring your balance to a card with a 0% introductory APR offer. This gives you a break from accruing interest, allowing you to focus on paying down the principal balance faster.
Best Options:
- Chase Slate Edge: Offers a 0% APR on balance transfers for the first 18 months, with no balance transfer fee in the first 60 days.
- Citi Simplicity Card: Offers a 0% APR for 21 months on balance transfers, making it an excellent option if you need a long time to pay off your debt.
4. Debt Settlement Services
For those struggling with overwhelming debt, debt settlement might be an option to consider. While it’s not the right choice for everyone, working with a debt settlement company can help you negotiate your debts down to a lower amount.
Best Options:
- National Debt Relief: A well-regarded debt settlement service that works to lower your total debt by negotiating with creditors.
- Freedom Debt Relief: Offers debt settlement and helps you create a customized plan for your situation.
5. Financial Coaching
Sometimes, the best way to tackle debt is to get expert guidance. Financial coaches can help you develop a personalized plan, keep you accountable, and offer tips on how to avoid debt traps in the future. Many coaches offer affordable rates and online sessions.
Best Options:
- SmartPath Financial Coaching: Offers online coaching tailored to your personal financial goals, including debt reduction.
- Dave Ramsey’s Financial Peace University: Though best known for its budgeting techniques, Dave Ramsey’s program also includes significant debt reduction strategies.
6. Automated Savings and Round-Up Tools
Saving money is crucial to paying down debt, and some apps help you save money automatically by rounding up purchases or setting aside small amounts regularly. This can help you build an emergency fund or even use extra savings to pay down debt.
Best Options:
- Acorns: An investment app that rounds up purchases to the nearest dollar and invests the spare change in a diversified portfolio. You can use the savings to pay down your debt or build your savings.
- Qapital: Lets you set up customizable savings goals, including debt repayment, and automatically transfers money into your savings account.
7. Personal Finance Apps with Debt Tracking Features
There are several personal finance apps that allow you to track all of your financial accounts in one place and help you monitor your progress toward paying off debt.
Best Options:
- Mint: Allows you to track credit card balances, loans, and other debts while helping you manage your budget.
- You Need a Budget (YNAB): While not specifically a debt-reduction tool, YNAB is a budgeting app that helps you prioritize debt payments and set financial goals.
8. Peer-to-Peer Lending
If you’ve been denied a traditional loan, peer-to-peer lending might be a viable option for consolidating your debt. Through these platforms, individuals lend money to others, often at better rates than traditional banks.
Best Options:
- LendingClub: This allows you to consolidate your debt through peer-to-peer lending with competitive rates.
- Prosper: A similar platform that helps you consolidate debt with better loan terms than many traditional lenders.
Conclusion: Debt Reduction Tools
So, reducing debt doesn’t need to be complicated, and with the right tools, you can make significant progress. While these tools and resources can make the process easier, remember that consistency, discipline, and a long-term view are key. No matter what method or tool you choose, the most important part is taking that first step toward financial freedom.
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