To reach financial freedom you’ll need to pay off short-term debt as fast as possible. Using short-term debt to pay for expenses or depreciating assets is a financial trap, because it ties your money into paying interest when it could be used to invest for your future. Our team will review your financial situation and help you decide which strategy for paying off your short-term debt as fast as possible is right for you.
Short-Term Debt Management
Benefits of building wealth with no short-term debt:
Keeps the bank happy
If you’re applying for a big loan (i.e. for a business or an appreciating asset like a house) you’ll be much more of an ideal candidate and will be able to borrow more if you have little to no debt.
Less stress for you
When an unexpected expense pops up that you have to pay for, you won’t have the stress of foreboding debt repayment dates hanging over your head.
You'll save A LOT in interest costs
The risks of debt consolidation:
There can be extra fees and charges
Establishment fees etc. with your bank to consolidate your debt should be taken into consideration
It encourages more debt
Debt consolidation is a quick fix for your debt problems, so it can create the illusion that you’re not in as much financial trouble as you really are.
It doesn't solve the root cause of the problem
Having multiple short-term debts is a red flag for bad money habits and a debt consolidation is a plaster not a cure.
Ways to Pay off Short-term Debt FAST
01 Pay off your debts FAST with a debt snowball
A debt snowball is a way to pay off your debts by paying extra on your loans one at a time, starting with the highest lowest balance. This strategy means you’ll pay a bit more in interest than other strategies, because you’re not attacking the highest interest rate first. The benefit of using a debt snowball is it gives you early wins and has the highest success rate for getting you debt free because you stick to it.
02 Pay off your debts FAST with a debt avalanche
A debt avalanche is a way to pay off your debts by paying extra on your loans one at a time, starting with the highest interest rate. This strategy requires some discipline, because it might take a while before you’ve paid off your first loan. The benefit of using a debt avalanche is it saves you the most money on interest payments.
03 Get a debt consolidation loan and pay extra repayments
Debt consolidation might be the right fit for your financial situation, if you’re needing to get approved for a mortgage soon. It lumps multiple short-term debts into one loan with one repayment, usually at a lower interest rate than what you had been paying, which is more attractive to lenders than multiple loans. However, a debt consolidation is a loan to address a debt problem, which has its risks.
Introducing our Leaps & Bounds Debt Crusher Guide.
Learn more about the three above strategies by downloading our Leaps & Bounds Debt Crusher Guide and get one step closer towards crushing your short-term debt.
This guide explains our top three debt crushing strategies (debt snowball, debt avalanche and debt consolidation), helping you choose which strategy is right for your situation.
The Leaps & Bounds Debt Crusher Guide also contains a planner to help you keep track of your debts and pay them down faster, ensuring you escape the shackles of short-term debt sooner.
Benefits of Using a Financial Advisor
Builiding Your Wealth
At Futurebound, we believe that the path to building wealth shouldn’t be a secret. Our team offer expert advice and knowledge to help you begin to build wealth and become financially free
We offer various free, practical, educational resources so you’re able to put your financial plans into motion and stick to your goals.
“Don’t leave your financial freedom to chance, Jeff is incredibly knowledgeable and passionate about helping build a better future. Highly recommend Jeff and the team if you have a property and are looking to increase your wealth by looking at buying an investment property. With Jeff’s help it is easier than you may think!”
“He arranged loan approvals from multiple banks with best interest rateJeff was very helpful and supportive to us in buying our first home. He arranged loan approvals from multiple banks with best interest rates. Very patiently answered all my stupid questions and advised us on bank loan repayments and finance planning. This actually helped us a lot to get through the stressful times. I would definitely recommend to anyone wants to get into the market.”
“Jeff is a really nice and considerate guy who really has your best interests at heart. He’s helped shave off tens of thousands of dollars of interest repayments, as well as helped me understand and implement ways to cut my mortgage repayment timeframe by about two-thirds. Thanks, Jeff and the team!”