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There are, in fact, bad ways to pay off debt.
Just because youre shifting numbers around doesnt mean that your behaviors changing, Cruze said.
Its not going to be the math.
One of the primary ways we see people shuffle debt around is through debt consolidation.
The only time I would look into debt consolidation is with student loans.
Taking Out a Personal Loan
Got major debt?
Why not take out a personal loan to knock it all out?
This is a loan that lets you borrow money against your homes equity.
Its in the same category as taking out a personal loan.
Too many people break into theirs early to put the money collecting there towards paying down their debt.
This is a terrible move.
People will go and borrow on their 401(k), Cruze said.
Also, youre unplugging your long-term wealth building play.
What could be investing there and making you money, youre pulling out into a loan.
This is another way of moving debt around without chipping away at the root problem.
Now, if you are using any of these strategies to pay off debt, dont beat yourself up.
But do change courses.
Look into proven methods, like the debt avalanche method or debt snowball method to eliminate debt.
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