Don’t Make These 5 Mistakes When Paying Down Debt

Written By Aaron Sarentino
Dec 26, 2022
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Paying down your debt seems pretty straight forward. However, it involves much more than merely making monthly minimums or avoiding interest. Avoiding these 5 mistakes will save you money and help you pay down your debt faster and more safely. 

1. Adding New Debt

You may feel less anxious about taking on new debt as you pay down your current debt and see your accounts return closer to zero. However, taking on debt as you pay it off is asking to shovel one pile of dirt out of a hole only to dump in another. Not only are you perpetuating the problem you’re trying to solve, but you’re also hurting your credit score by opening new accounts. 

Paying down your debt is a process that requires sacrifice and persistence. If you’re struggling to make monthly payments on any of your loans, then it’s not a good idea to take on more debt. Wait until you have a steady income, you’re able to make payments on time, and your credit score has been improving.  

2. Keeping the Same Spending Habits

Your spending habits are likely what got you into more debt than you could handle. Your financial situation will only become worse if you don’t make substantive changes to your budget. Create a blueprint of your finances. Separate spending into fixed and variable, then determine what you can sacrifice and what can be reduced. 

A handful of simple changes can snowball into a big difference. Meal prep and make your coffee at home. Share subscription services with a friend or family member. Find activities that don’t cost money, or try to negotiate your mobile service or car insurance. 

3. Paying Down Debt Without an Emergency Fund

Depositing money into a savings account while you’re struggling to pay off your debt might seem like a bad idea, but it’s essential. You won’t have the funds to weather a financial crisis if you give every dollar of your income to your creditors. 

Imagine having little to no money and suddenly needing cash for a medical emergency or a car problem. You’ll have to go even deeper into debt. Emergencies happen. It’s often better to pay off debt more slowly but more safely. 

4. Paying Down Multiple Debts at Once

It may seem natural to spread your income around when paying off multiple debtors, but this leads to slow progress across accounts. It’s better to continue paying the minimum on each debt while attacking your largest or highest-interest debts one after the other. 

You could also consolidate your debt into one loan with a lower interest rate. This approach simplifies the repayment process because you only have to deal with one creditor. 

5. Not Working with Debt Experts

Working with professionals to settle your debt could save you a healthy sum of money. Debt settlement companies take over communication with your creditors and negotiate a better deal for you. 

Trust and experience are what make a good debt settlement company. Americor has relieved $2 billion in debt over 30 states. They are fully accredited by the Better Business Bureau (BBB), the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA). With over 400 employees, Americor can tailor the optimal solution to your situation and help you navigate these uncertain financial times. 

Determine if you qualify for debt resolution, get a free debt analysis to determine if debt consolidation is viable by talking to a debt consultant today. 

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Americor provides debt solutions to thousands individuals and families all over the country. We’re a next-generation debt relief company with a proprietary platform designed to help clients get out of debt quickly. Together we’ll develop a strategy for you to enjoy a debt free lifestyle. Learn more about how Americor can help relieve the burdens of debt today.

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We provide debt resolution services. Our clients who make all monthly program payments save approximately 40 – 50% of their enrolled debt (average of 43%) upon successful program completion, before program fees. Fees are based on a percentage of your enrolled debt at the time of starting the program and range from 15%-25% of your enrolled debt. Programs range from 20-48 months. Clients must save at least 25% of each debt due to an enrolled creditor before a bona fide settlement offer will be made. On average, clients receive their first settlement within 4-7 months of enrollment and approximately every 3-6 months thereafter from when the prior debt was settled. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Our program is not available in all states; fees may vary by state. Some programs may be offered through The Law Firm of Higbee & Associates d/b/a Advantage Law. The use of debt resolution services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Any amount of debt forgiven by your creditors may be subject to income tax. Clients may withdraw from the program at any time without penalty and receive all funds from their dedicated account, other than funds earned by the company or fees paid to third-party service providers, as may be applicable. Read and understand all program materials prior to enrolling. Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt relief companies. To determine the offers you may be eligible for, Americor conducts a “soft credit pull.” This credit pull does not impact your credit score, creditworthiness, or ability to obtain credit from other sources. The soft pull is not a tradeline entry, it does not report against your score and will only take a few minutes.

Americor Funding, LLC (18200 Von Karman Ave, 6th Floor Irvine, CA 92612) is fully accredited by the Better Business Bureau (BBB), the American Fair Credit Council (AFCC), and the International Association of Professional Debt Arbitrators (IAPDA). CA Department of Financial Protection and Innovation (DFPI) License # 603K913.

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