When Oscar Torres finished college, he was left with a mountain of debt. After 8 years of going to school and working part time, he had amassed more than $20,000 in credit card bills.
“I had a couple of jobs, but I wasn’t making enough money, so I started putting a lot of my expenses on a credit card,” said Oscar. “After college I was living paycheck to paycheck. I couldn’t sleep at night knowing that it was going to take me 22 years to pay off a $20,000 credit card balance. That’s no way to live,” said Oscar.
In order to take control of his finances, Oscar decided to consolidate his debt at a lower rate with a loan through Prosper.
“Now I live my life happy,” said Oscar. “I have extra money each month that I put into a savings account, I opened up a 401K and I’m on a great financial path.”
Oscar is not alone. The average U.S. household with debt carries $15,355 in credit card debt and $129,579 in total debt, according to nerdwallet.com. For people like Oscar, the weight of paying off high-interest loans can be overwhelming.
Fortunately, there are a variety of options that can help people get on top of their finances and put themselves on the path to financial control.
Step 1: Build a solid budget
There are a variety of online budgeting tools available today that can help you create a budget and organize your spending. Even if you aren’t able to stick to the budget you set every month, it’s important to know where your dollars are going so you can take action accordingly.
Step 2: Consider cost-cutting measures
Can you switch to a cheaper phone plan? Could you cut cable? What about buying generic brands? These are important questions you can ask as you audit your expenses and take appropriate measures to trim unnecessary spending.
Step 3: Research debt consolidation options
If you are currently in a situation where you are dealing with a large amount of debt, having difficulty managing multiple payments, debt consolidation might be a good choice for you. For many, a debt consolidation loan helps simplify things. Instead of having multiple bills with varying high interest rates, you can take out a loan to pay off all your debt, and then simply repay the one loan at a lower fixed interest rate.
At Prosper.com, you can borrow between $2,000 and $35,000. Loans through Prosper are fixed-rate, fixed-term and have no hidden fees or pre-payment penalties. Checking your rates is easy and won’t affect your credit score.
The opportunity to take out a loan through Prosper helped Oscar gain control of his finances. “I went online it was quick, easy and simple. Within a week, I got the money in my bank account and now I’m going to be able to pay off my credit card debt in 3 years at half the rate I was paying before,” said Oscar.
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