This is part 3 of 3 in a series where I expand on the post where I said you can save money by reducing your interest rate. In this post we will talk about how you can reduce the total amount you pay in interest by reducing your interest rate.
The ideal situation would be to not pay any interest at all but there are cases where you will have to pay interest anyway. This may be in the case of having a
- car loan
- credit card.
If you are not able to pay off the balance in full you may be able to save money in the long run by paying less total interest. Many people are not aware of the fact that they can reduce the interest they pay on debt but it really can be done if you are prepared to put in a little bit of effort.
Here are three of the many ways you can end up paying less in interest over time on any debt that you have:
- Ask for a reduction
- Transfer a balance
- Consolidate debt
Ask for a reduction
One of the easiest ways to reduce your interest rates is simply by asking. I challenge you today to call up your mortgage provider or your credit card company and speak to someone about getting a rate reduction. They might require some action on your part or they may deny you. The thing is that you will never know unless you try so you might as well take a shot at it.
Transfer a balance
Another thing you can do is to transfer your balance from a high interest card to a lower interest one. Be very careful to note the terms and conditions of the transfer if you do decide to use this option. Make sure that the balance transfer does not have any fees associated with it so that you do not end up paying fees and reducing the impact of the savings on the interest rate.
The third thing that you can do is to consolidate your payments into one lower interest or zero interest balance. This can be done in a number of ways such as taking out a low interest rate loan or by getting your lender to consolidate your payments into a new payment plan.