Money May: Save Money on Interest
As part of our one-year Ultimate Money Challenge, we challenge readers every month to tackle a variety of personal finance challenges. We are taking debts this month. Let’s lower the interest rate on your debt.
Interest can actually get in the way of your goal from getting out of debt. Instead of investing all your money in paying off the principal, you should use some of it to pay interest, which means you pay more over time and pay off longer. That is why this month’s challenge is to lower the interest rate on your debt. Some ways to do it:
- If you have consumer debt, call your credit card company and ask for a better rate.
- If you are repaying a student loan, set up a student loan direct debit to get a discount on interest.
- Refinance your student loan
- Consolidate credit card debt with balance transfer
Some of these moves should not be taken lightly. For example, refinancing a student loan can lower your interest rate, but if you have a federal loan, you could lose your benefit options. These options are not for everyone, but we encourage you to find out what options might be right for you so that you can save money on interest and get one step closer to your debt bribery.
If you’re up for the challenge, tell us your plan of action. What can and will you do this month to lower your interest on debt?