Get a Fresh Start on Debt
If you’re realizing you didn’t quite stick to your annual or holiday budget, you may be looking for solutions to pay off your extra expenses. If you need a little extra help conquering the debt you’ve built up over the holiday season (or throughout the year), the Chaffey FCU Lending Team may have the option you are looking for.
Review your debts.
About 42% of shoppers planned to use their credit card for holiday gifts during the latest holiday season, according to Experian. If you are one of those people, it’s important that you review each of your cards, so you know how much new debt you’ve acquired and how much total credit card debt you’ll have to pay off.
Create an inventory of your debts by reviewing any credit cards, installment loans, or holiday loan offers you may have taken advantage off. Build a record of these debts by noting elements such as the balance, minimum monthly payment, interest rate, and the payment due date. Knowing how much you owe each month and when you owe it can help you budget accordingly and may prevent you from getting deeper into debt. Understanding the interest rate on each of your loans can also help you prioritize the loans you are paying the most interest on.
Follow a Plan.
Once you create a record of your existing debts, you can use it to build a plan. Add your loan payment due dates to your calendar, or create reminders so you never miss one. When possible, commit to paying more than the minimum on your credit cards and other loans - paying your loan off more quickly means there is less time for interest to grow on the loan, which means less interest charges you’ll have to pay.
Financial Calculators can be a helpful tool to help you understand the basics of your financial situation. You can use the financial calculators on the Chaffey website to help you answer questions such as “How long will it take to pay down my credit cards?” or “How will making additional payments help me pay off my loans?”. These calculators are designed by CULookup, a service offered through America’s Credit Unions.
If you owe multiple debts and need help managing them, or want to review possible ways to pay them off more quickly, PowerPay could help you evaluate your options. Created by Utah State University, PowerPay works to help you explore possible debt recovery options and answer questions such as “How soon can I be out of debt?” or “What would debt consolidation do for my situation?”. Add your debt information into this free tool, and discover ways to eliminate your debt.
Consolidate.
Depending on the number of debts you must manage, a debt consolidation loan may make sense for you. Conquering your debt with a debt consolidation loan or transferring credit card balances to a single card is a popular option. See why debt consolidation is a popular choice:
Fewer bills to track. Consolidating your debt means you only need to manage the due date and balance for your consolidation loan. No more balancing payments on multiple credit cards or installment loans. Simply mark your calendars for your debt consolidation payment due date.
Potential for lower rates. If you can secure a lower rate on your consolidation loan, you may pay less in total interest! Credit cards from retail stores or banks can often be near or above 30% APR (if the rate on your store or bank card is variable, it might even increase later on!). Chaffey FCU personal loans and credit cards start as low as 9.99% APR* and are fixed once you sign.
Ability to eliminate debt more quickly. Securing a lower interest rate with a consolidation loan means less interest is added to your original loan balance over time. With interest charges growing more slowly, you may have the ability to eliminate your debt more quickly.
However, it’s important to know that debt consolidation may not be the best choice for every person or situation. Your current credit history and score may affect the interest rate you receive, which may impact the cost of your debt consolidation loan. You must also be able to stick to improved financial habits! Freeing up space on your existing credit cards by moving that debt into a consolidation loan may tempt you into using those cards more often, even if doing so doesn’t fit into your new budget. Talking with the Chaffey FCU Lending Team about your current lending needs or situation may help you determine if debt consolidation will help you save.
Guidance from Financial Coaches.
Building a plan to eliminate and stay out of debt can be an overwhelming process. If you need help building a payment strategy, are having trouble building a budget that fits your debt payments, or want some assistance in using a debt tool such as PowerPay, Chaffey’s Financial Coaches can provide one-on-one assistance. A personal review with a W.I.S.E. Financial Coach can help you accomplish your financial goals. Get in touch with us today and a Financial Coach will reach out soon to get you started on your path to wellness.