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How To Prioritize Your Debt Repayment

By November 8, 2021June 17th, 2022No Comments
How To Prioritize Your Debt Repayment

How To Prioritize Your Debt Repayment

It can take a long time to pay off your debt, depending on the amount you owe. You can lose hope or give up when there are other financial goals that you want. It’s therefore important to have a plan for paying it off.

Even though that may seem daunting, there are six accounts that you need to pay. There are some guidelines that will help you prioritize debt repayment.

1. Organize Your Debts

First, find important information about all your debts. These include;

  •     The balance
  •     Minimum payment
  •     APR
  •     Loan maturity date

This information is usually found on statements that you receive. If you are unable to find the information, call your debtor to ask for it. 

Your balance and interest rates are the two most important information that we will be focusing upon. This can be made easier by having a budget.

2. Organize The Debt Based On Interest Rate

This way of debt management is referred to as the “debt-avalanche” approach. The method will save you most money during your debt repayment journey. 

You simply need to organize the debts in a way that places the highest rate of interest first and then moves to one with the lowest rate of interest.

Paying off debt this way will save you more money, as the interest that continues to increase in your account will reduce. If you aren’t careful, interest can become a very serious factor when it comes to debt repayment plans.

3. Organize Your Debt Depending On The Balance

What if you ordered the payday debt from highest to lowest interest rate and found that the highest interest debt you owe is also the highest? This might seem discouraging, especially if you haven’t started planning.

If you find yourself in this situation, and might be staring at a huge mountain that you don’t believe you can climb yet, then you may be better off using the debt snowball technique. Instead of focusing on interest rates, you will first pay off the lowest balance debt and then work your ways up.

4. Momentum: Snowball Your Payments

While you may be paying the minimum amount on your debt right now, it won’t allow you to get debt free very quickly. You should be paying more on your debt if you want to get out of debt and live a free life. This is exactly how the snowball system works.  The Debt Snowflake Method

Another option is the debt snowflake, which can be used with the debt snowball and debt avalanche.

You might have guessed from the name that “snow flaking payments” means making small payments whenever possible.

Let’s suppose you find $5 at the gym or $10 from your coworker for the meal they bought months ago. Or that you get $50 from a relative to celebrate your birthday.

What Should You Do To Prioritize?

There is no right or wrong method. It’s up to you to decide which method you use.
It doesn’t matter how much you owe, what matters is that you are paying down your debts and moving forward. You will be closer to your financial goals and your money will become yours by paying off your debt. You will have peace of mind knowing that no one owes you anything.
There is no need to choose between these two methods. The snowball method could be tried, but if it isn’t motivating enough, you can switch to the avalanche. You don’t have to make a plan. It is important that you are focused on repaying your debt.

Budget The Payments

Budgeting for savings is important, but so should extra debt payments.

Look at your budget to see if you can temporarily rent from any of these places. Perhaps you can live without eating out for a month and put the $50 you have saved toward your debt. You could also cancel your cable and send $150 towards your debt.

Determine how much you can pay and include it in your budget. It’s not a good idea to only budget for minimum payments, then spend the rest of the month on your debt.


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  • pay off debt/ debt payoff plan
  • student loans
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  • interest rate debt
  • credit card debt
  • personal loan
Wenn Lauren Snow
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