Applying For Federal Financial Aid
The process for obtaining federal financial aid is relatively easy. You fill out a single form, the Free Application for Federal Student Aid and send it to your schools financial aid office. Then they do the rest. The FAFSA is your single gateway to Stafford loans, Perkins loans and PLUS loans. Many colleges also use it to determine your eligibility for scholarships and other options offered by your state or school, so you could qualify for even more financial aid.
There is really no reason not to complete a FAFSA. Many students believe they wont qualify for financial aid because their parents make too much money, but in reality the formula to determine eligibility considers many factors besides income. By the same token, grades and age are not considered in determining eligibility for most types of federal financial aid, so you wont be disqualified on account of a low GPA.
I Have $15000 In Credit Card Debt What Should I Do
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If youre carrying serious credit card debt like $15,000 or more you’re not alone. The average household with revolving credit card debt that is, debt that they carry from one month to the next had of revolving balances in 2019. That’s just the average. It’s not at all uncommon for households to be swimming in more that twice as much credit card debt.
But just because a $15,000 balance isn’t rare doesn’t mean it’s a good thing. Credit card debt is seriously expensive.; Most credit cards charge between 15% and 29% interest, so paying down that debt should be a priority.
However, dealing with a five-digit credit card debt can feel overwhelming. Coming up with that kind of cash is daunting, but there are steps you can take to manage a heavy debt load:
If youre used to relying on your credit card to make your day-to-day purchases, cutting yourself off from charging might be really tough at first. But to get out of a hole, youre going to have to stop digging.
About the author:Lindsay Konsko is a former staff writer covering credit cards and consumer credit for NerdWallet.Read more
Two Common Credit Card Debt Repayment Strategies
These repayment strategies can help you pay off credit card debt quickly. Keep in mind, you can use these strategies even for non-credit-card debt.
Before you begin, its best to list all your debts and their corresponding interest rates that youre being charged. Then figure out how much youre required to pay on those debts every month, plus any extra money you can afford above and beyond the required minimum payments. You may only be able to only come up with an extra $25 or $100, but whatever you come up with should align with your monthly budget of income vs. expenses and not stretch you so thin that you are foregoing meeting your basic needs.
Both methods require that you continue to pay the minimum payments so you keep all the accounts current, but apply any extra funds to the debt youre focusing on attacking first. Here are the two most popular debt payoff methods and how they work:
Pick the repayment strategy that you know will keep you moving forward. After all, if your repayment strategy doesnt keep you motivated, you may not stick to it.
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How I Paid Off Over $12000 In Debt In 10 Months
Have you ever just woken up one day and realized that something needed to change?
Shortly after I started dating my husband, I knew we were going to get married, and that got me thinking about my financial situation. I was in debt, and I did not want to bring that to our marriage or saddle my husband with debt that was all my fault.
So, one day I decided I was going to change, bought Dave Ramsey’s book The Total Money Makeover, got myself on track, and didn’t look back. I paid off $12,000 of credit card and auto debt in 10 months, making less than $32,000 a year in a very high cost of living area.
Here’s how I did it:
Be Ready to Change
This is the first step in preparing to pay off debt, because it is really hard when you sit and think about what paying off debt will mean. No more random meals out. No more using your credit card. No more spending money freely and without checking your budget. Everything has to change if you want this to happen. You will not be able to keep doing what you’ve done and get the same results. It will be very, VERY hard, but you can do it! Honestly, once you get going, the progress you make is addicting and it really does beat spending money. You just end up not wanting to hurt your “debt snowball” money.
Create Your First Budget. Now.
Get Familiar With The Debt Snowball
Do Whatever It Takes
Stop Using Your Credit Cards!
Get In Touch With Your Inner Budgeting Nerd
I know you can do this!
Take that first step and don’t look back!
Create A Monthly Spending Planit Will Help You Avoid More Debt
To learn how to get out of debt and to stop borrowing from your credit cards again and again, create a monthly spending plan for your money. This will let you live within your means rather than above your income, which is where credit card debt comes from. It will also make it clear when you can expect to be debt-free so long as you stick to the plan.
Want help making a plan? Weve got an interactive budget calculator spreadsheet that will guide you through the process and make the idea of budgeting way less painful. This will help you stay within your budget and maximize your ability to pay down your debts. We also have lots of other budgeting resources if you prefer different ways of budgeting.
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Pay More Than The Minimum
Look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay off your bill. If you pay more than the minimum, youll pay less in interest overall. Your card company is required to chart this out for you on your statement, so you can see how it applies to your bill.
Simple solution: Pay a bit extra each month. Every dollar over the minimum payment goes toward your balanceand the smaller your balance, the less you have to pay in interest.
How Do I Pay Off Debt With The Avalanche Method
With this debt elimination strategy, also known as debt stacking, youll pay off your accounts in order from the highest interest rate to the lowest. Heres how it works:
- Step 1:;Make the minimum payment on all of your accounts.
- Step 2:;Put as much extra money as possible toward the account with the highest interest rate.
- Step 3: Once the debt with the highest interest is paid off, start paying as much as you can on the account with the next highest interest rate. Continue the process until all your debts are paid.
Every time you pay off an account, youll free up more money each month to put towards the next debt. And since youre tackling your debts in order of interest rate, youll pay less overall and get out of debt faster.
Like an avalanche, it might take a while before you see anything happen. But after you gain some momentum, your debts will fall away like a rushing wall of snow.
Example of the Debt Avalanche in Action
Lets say you have four different debts:
|Type of Debt|
To use the debt avalanche method:
So, youll end up paying off your accounts in this order:
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An Example Of How It Works
For example, lets say all your debt is on three credit cards. Each has a $25 minimum payment, but youve been paying an extra $75 a month on each one, for a total of $100 per card.
- Card A: $25 minimum payment, plus $75
- Card B: $25 minimum payment, plus $75
- Card C: $25 minimum payment, plus $75
Now, lets say you want to pay off Card A either because it has the highest interest rate or has the smallest balance .
To start your pyramid, limit payments on Card B and Card C to $25 the minimum and take the remaining $150 you previously applied to those debts and add it to the $75 extra you already are applying to Card A.
This means you now are applying $250 to the debt on Card A, and $25 each to the debts on Card B and Card C:
- Card A: $25 minimum payment, plus $225
- Card B: $25 minimum payment
- Card C: $25 minimum payment
Repeat this process every month. When Card A is paid off, take the $250 you previously spent on that balance and move it to Card B. This means you now are applying $275 each month to Card B and $25 to Card C.
- Card B: $25 minimum payment, plus $250
- Card C: $25 minimum payment
Once you pay off Card B, move all the money you were paying on Card B to Card C, and keep making that payment until you are debt-free.
How Much Debt Do You Have
No more hiding your head in the sandits time to face the truth so you can start doing something about it! Listen, adding up the grand total of your debt isnt going to be pretty. Lets rip the Band-Aid off. Ready? Take a deep breath and open up those envelopes and account pages. Look at the number, and no matter how small or large it is, tell yourself, I can do this.
Now that youve got a total, you can figure out how soon you can pay it off. Use this super easy debt snowball calculator tool to add up all your debt and find out how fast you can get it out of your life for good. Well show you the proven plan that will not only help you pay off debt but kick debt to the curb for good.
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Best Credit Card Calculator To Use By Situation
If you want to determine what it will take to become debt free: Use WalletHub’s credit card payoff calculator.
This type of credit card payment calculator can tell you two things: 1) The monthly payments you’ll need to make to rid yourself of credit card debt within a certain amount of time; and 2) How different monthly payment amounts affect the length of time it will take to pay down what you owe.
If you want to see how much you’d save with a lower interest rate: Use WalletHub’s credit card interest savings calculator.
A credit card’s interest charges stem from its introductory APR and regular interest rate as well as your balance and monthly payment. A credit card interest rate calculator takes all of those things into account and enables you to quickly determine whether getting a lower interest rate will save you a lot of money or not be worth the time and effort.
If you want to see the value of moving existing debt to a new credit card: Use WalletHub’s balance transfer calculator.
The cost of a balance transfer depends on a variety of factors, including the size of your balance, the new credit card’s transfer fee and 0% term, and how long it will take you to pay down what you owe. Figuring out if a given balance transfer offer will save you money necessitates comparing that cost to what you’d have to pay under the terms of your current account. It’s certainly possible to do this by hand, but this type of credit card debt calculator makes it significantly easier.
How To Make $40000 Credit Card Debt Disappear
Dear Debt Adviser,;
I was reading an article on debt and found your column. I need help. I have about $40,000 in credit card debt, and I’m one month behind on my mortgage. I’m probably a few months behind on some of my credit card debt and not sure what to do. Is bankruptcy an option? Should I sell my house and work on correcting my financial problems? Or should I just pay what I can? Thank you. — Ronald
I’m glad you found me. If you’re willing to work at this problem, I’m sure I can help. Let’s start with the good news — you’re back to work! A regular income is important when trying to take control of your finances. Now you just need to decide what to do.
Because you use the word “probably” to describe how far behind you are on your credit card accounts, it’s clear you don’t have a good handle on how much you owe, how late you are or how close you are to a foreclosure. To set you straight, I want you to begin your comeback by speaking with a counselor at a nonprofit credit counseling agency. You can find one through the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
The best balance transfer credit cards for you may be a click away. Check out card offers from our Bankrate.com partners.
Once you have your options laid out from your housing and credit counseling, you will have some decisions to make. Here are a couple of things to consider:
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How To Pay Down Your Credit Card Debt
Readers often want to know what I would do in certain financial situations.
People sometimes characterize these queries as WWMD or, What would Michelle do?
I do my best to provide informed answers based on my experience and reporting, including conversations with numerous financial experts. Here are a few:
Q: I have about $13,000 in credit-card debt with balances from a low of $200 to a high of $2,000. I will be getting a small lump sum of money. Whats the best strategy to pay these off? Should I also consider doing a loan on my 401?
The first thing I would do is take those cards out of my wallet. Freeze them, cut them up, and dont use them again until all the debt on ALL the cards is paid off.
Then take some of the lump-sum money and put it away for a rainy day, even if its just $100. Because if you dont have any cash savings when an emergency comes up, youll just run up more charges on the credit cards.
Next, organize your cards from the lowest to the highest balance. So at the top of the list should be the card with $200.
Starting with the smallest balance means getting rid of a debt fast. In my experience, people typically get super excited when they see such quick progress. This results in their becoming aggressive in getting rid of the rest of their debt.
And no, no, no, dont take money out of your 401. Let that money stay invested for retirement. Dont compound one mistake with another .
A: Retirement savings on pace? Check.
Option Two: Personal Loan
If you dont want to apply for yet another credit card, you could consider a personal loan. You can get prequalified at multiple lenders without hurting your credit score, and find the best deal to pay off your debt faster.
Personal loan interest rates are often about 10%-20%, but can sometimes be as low as 5%-6% if you have very good credit.
Moving from 18% interest on a credit card to 10% on a personal loan is a good deal. Youll also get one set monthly payment, and can pay off the whole thing in 3 to 5 years.Sometimes this may mean a higher monthly payment than youre used to, but youre better off putting your cash toward a higher payment with a lower rate.
And youll get out of debt months or years faster by leaving more money to pay down the debt itself. If you want to shop for a personal loan, we recommend starting at LendingTree. With a single online;form, dozens of lenders will compete for your business. Only a soft credit pull is completed, so your credit score will not be harmed. People with excellent scores can see low APRs . And people with less than perfect scores still have a good chance of finding a lender to approve them.
LendingTree is not a lender. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. Terms Apply. NMLS #1136.
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