A Different Way to Get Rid of Your High Interest Debt

We don't mean to, but sometimes our spending spirals out of control. Before we know it, we have a mounting, exponentially growing pile of debt in front of us. If you've had many sleepless nights, not knowing where the money would be coming from or if you've already been to your bank and been denied a loan, read on.

Before I talk about what you're going to do though, I want you to honestly sit down and realize how you got to be where you are in the first place. If you're spending more than what is coming in, you have a debt problem...and you're part of the majority here in the US. It's in our culture and in our very being...but that doesn't mean you have to go along with it. Take the time to break free from it now!

The easiest and best plan out there to get you digging...cause you know you're going to be digging yourself and your family out of this....is Dave Ramsey's Total Money Makeover. Many churches also offer his Financial Peace University. I have no affiliation with the guy, but I have read some of his books and listened to his radio show. I do believe he has some mostly sound advice that can easily be followed..that is the key here...baby steps heading in the right direction!

Keep in mind, if you are activated Reserves or National Guard, you can get a 6% interest cap on your loans and credit cards, due to the Soldiers and Sailors Civil Relief Act. Call your creditors and get your rates negotiated down to this amount. There are also other benefits you can read about at the site above.

If you are not an activated Reservist or National Guardsman, keep reading! Get out all your credit cards, payday loans and any other high interest loan paperwork together. You're going to estimate how much money you will need to get rid of your debt. You are going to visit the fairly new peer-to-peer lending site, Prosper. Their max loan amount here is $25,000. The gist of this site, is that everyday people, sign up and loan money to other everyday people who register on the site, asking for a loan. The loanees lend anything from $50 on up, per loan...until it adds up to the final amount of your loan. Once that happens, your loan is funded, and you will almost immediately, get your money.

The beauty of this site, is that you have a VERY good chance, even with poor credit and ratings, to get a fairly low interest loan. Lately, those with poor credit, have been getting loans in the 11-19% interest range. And, if your credit isn't already tarnished, you can easily get under 10%. Why such low rates? I think most of the loaners on the site are just plain inexperienced and tend to give out money more readily. The site has only been around just over a year, and this is all still a new concept. Some loaners even use their emotions to choose who they want to loan money to! The "prettier faces" tend to get more attractive loans than those with no pretty faces to be seen....yes, you can upload a photo of yourself or even your dog!

Once you sign up as a loanee, the site does a credit check on you, and posts basic credit information, job information and a few other tidbits that can be used to determine your credit risk to the loaners who peruse the listings. You are not identified in any way other than the user name you choose. You also upload any photos you choose. With that being said, I urge you to be honest and to visit the pages below to learn more about Prosper. Learn how you can best write up your listing. Once your loan is actually funded, loaners will continue to bid down your interest eBay-style!

• How to Borrow money at Prosper

• Visit the Prosper Borrower forums to get ideas on how to write up your listing

What if you fail to pay back your loan? Prosper will treat you just like any other debtee who doesn't pay. Your file will get sent to a collection agency, who will pursue you just like any other collection agency, and your credit will be adversely affected. I say this because I honestly think some folks who visit the site don't take it seriously or try to take advantage of this new concept. The lender message board is full of posts from loaners who lost money on one loan or another.

Decide to turn over a new leaf today. Take the time to look HONESTLY at yourself and your spending habits today. Recognize your problem, come up with a plan and start getting on the road to recovery TODAY. I have read and heard countless stories from many people who are in your shoes or worse, and they managed to bring themselves back from the brink...you can to!

Already been there, done that...or are about to? Then how about posting what helped you along?

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