Are you in serious debt? Do you feel like you'll never get out of debt? Are you tired of making the minimum payments on a huge pile of debt for years, and are you desperate to escape it? If all of the above answers are "yes", then keep reading for the best debts hacks.

‍

Hack debts on your own

1. Debt Consolidation Loan

Many banks offer personal loan to debtors who are in need of consolidating their debts. These loans are very useful as they are meant for purpose of debt consolidation. Thus, you can take out these loans at a much lower interest rate compared to what you would have to pay otherwise.

‍

2. Debt Snowball Method

The debt snowball method is one of the easiest ways to reduce debt quickly. By paying out extra money towards the smallest debt first, you'll wind up knocking the others out of the way. Start by making monthly payments towards the smallest balance, and then make larger payments to the next lowest debt. With this method, you can complete your debts in a short amount of time without needing to get a loan.

‍

3. Balance Transfer Method

As a balance transfer credit card customer, you can shift your maximum credit card balance to a card with lower interest rate. The total amount that you pay as interest on this card will decrease, which will result in more money in your pocket.

‍

‍

Getting Help

4. Credit Counseling

If you are in the middle of a debt crisis and need help to manage your finances, consider credit counseling. Credit counselors can help by providing free advice on how to reduce debt and manage it much easier.

‍

5. Enroll in a debt consolidation program

The debt relief agency will negotiate with your creditors and try to reduce or eliminate the balance of all your debts. You just have to make a monthly payment towards the debt relief agency and they will pay off all your debts for you. This way, you will get out of debt sooner.

‍

6. Settle your debts

If you have high-interest rate debts that you can't repay, you might want to look into debt settlement. These companies will negotiate with lenders and result in a lower interest rate. Once you save enough money for one of these companies, they will pay off the debt for you. The amount you pay each month is put into an account called "escrow account". When the sum reaches a certain point, the company will disburse it to the creditors.

‍

7. File for bankruptcy

Chapter 7 bankruptcy is a means to liquidate all of your assets under the supervision of a trustee. The debts will be paid back, but the assets are not being auctioned off.

Chapter 13 bankruptcy is a repayment plan in which you can get a certain period of time to pay off your debts and sometimes have a job or income depending on eligibility.

‍

Hack your debt by avoiding it or paying it down quickly

8. Follow a budget

You should create a budget to plan your income and expenses. A budget is an important tool for staying within your means. A budget also helps you to track your monthly income and expenses to make sure that you don't exceed any preset limits. If you have a little extra cash, you can put it toward paying off debt.

‍

9. Reduce credit card usage

Don't get carried away. Don't use a credit card to buy things you can't afford. Don't go over your limit. Use one only when you have the money in hand and can pay your bill on time.

‍

10. Make a list of your bad debt and rank it

High-interest debt is almost always a bad idea. Car loans, credit cards, and student loans are no exception. If you have multiple debts, it’s better to rank by the annual interest rate — not the total amount of the balance.

To get out of debt, we have to prioritize the debts that are costing us the most. For example, if you owed $30,000 on a credit card with a 24% APR and a car loan of $8,000 with a 9% APR, you would pay off the credit card first. The car loan has the lowest balance and is also much easier to manage compared to the credit card.