Step 1: Find yourself a platform that can negotiate lower interest rates

In general, it is recommended that you should try to negotiate your debt by calling your creditor.

People often never call their creditors to even ask for lower rates. As a result, it makes it harder to eliminate the debt and leads to higher costs.

Remember that lower interest rates always make it easier to pay off debt. A lower rate means that interest charges hold a lesser portion of each of monthly payment you make.

As a result, you can pay off the original debt owed much more quickly.

However, if you want to go the traditional way of doing it, the process is this:

1. Check the current interest rate on every credit card that you use

2. Write down the important facts about your credit:

a. Length of time you’ve been a customer for each account
b. How long you’ve gone without missing a payment
c. How much your credit score has improved since you opened the account

3. Check current credit card interest rates to know national average rates for each type of credit card you hold.

After that, you can call the customer service department and request a rate reduction. When you talk to a supervisor who has the authority to change your rates, you may find these tips helpful to negotiate lower interest rates effectively.

Step 2: Make your debts your priority

After you lower your debts, you should organize. Start from paying down your debt with the highest ARP and proceed to the lowest.

That way you will get rid of the biggest chunks of your debt expenses first, increasing more space in your budget as you start to pay less on total interest charges.

Step 3: Keep your diet until you get more cash

You want to grow your cash. You can’t do that by just paying down your debt. You also need to cut your unnecessary expenditure.

Think of it like a diet that you shouldn’t break as you are trying to lose all your extra financial burden.

The point is to maximize your free cash flow, the money that you are left with after you pay your bills and additional necessary expenses.

As you grow enough cash in hand, you can pay down your debt more quickly. The faster you reduce your debt, the lower are the interest charges that applied to your debt as well, which means you are saving money.

Once you pay down all the debt, then you can break your diet. You can continue to support your previous lifestyle.

The more cash flow you have available to reduce debt, the faster this goes. Faster also means fewer interest charges applied to your debt, so it saves you money, too.

It’s worth losing a few discretionary expenses for a short time to these high interest rate debts paid off fast.

Step 4: Focus maximum effort on your biggest debt first, minimum for the others.

You should focus on knocking out your credit card debt with the highest ARP.

Don’t make the mistake of dividing your money toward paying multiple debts at once. This is not cost-efficient.

Instead, it’s more effective to focus on just one debt. Make the minimum required payment on all the other credit cards.

For the credit card with the highest ARP, however, use all of your cash and make the largest payment.

Keep doing that each month until your balance on that card hits $0.

Step 5: Knock all the rest, one by one

Use the same strategy for your other credit cards. Make sure that you always hit the credit card with the biggest ARP and move down to the next once you’re done with it.

By the time you have shaved off a decent amount, you can start eating a bit more junk food, meaning you can add back some of your unnecessary expenses back again.

This helps you paying down debt more bearable. We all need to spend money on things that we enjoy and not doing for a long time can be hard.

While you should absolutely cut all your unnecessary expenses at first, you can slowly start adding them back to your budget to avoid overspending due to burning out.

This is where Ubund can make a difference in your life. While you are paying your debt, Ubund can help you maintain some of your non-credit card related expenses, such as your monthly membership to your internet provider by negotiating for a cheaper rate.

At this point, you should think about saving. Once you pay off your credit cards, you are going to have more additional free money left on your monthly budget.

Set up a monthly recurring transfer to savings. For example, if you save $300 every month, then you can save $150. Boom. You start generating an emergency fund.

Whenever you are paying your debt, always ask yourself:

1. Is this the fastest way to repay what I owe?
2. Is this the most cost-effective way to reduce my debt?

If there’s a faster, cheaper way to pay off what you owe, then you should do it.

Ubund is a cutting-edge platform that can do that for you.
If you have a provider that’s charging you unreasonably high rates that hurt your budget, contact Ubund and they will pay your debt. In exchange, Ubund asks you to pay back later at a lower interest rate.

Ubund also negotiates with your provider for a lower rate if you decide to repay by yourself.

Author's Bio: 

Cem Vardar has recently started wading the waters of personal finance and the fin-tech industry. I want to increase awareness on personal finance topics and help people get out of debt. Please check out my organization that's committed to helping people gain financial power and control over lives their through education and community-building: