This Is That Debt That Tends To Stack Up The Fastest

Category: Finance, Credit.

Did you know that HOW you pay your debts can affect how soon you will finishing paying them off- even if you keep paying the same amount for debt every month?

It s not always the easiest to figure out the mathematics, but there are three steps to quicker debt relief- guaranteed. Of course you might be able to get a consolidation loan, but if you re not eligible or are not interested then there are several other things you can do. STEP ONE- Create a list. Now there is another rule that you can go by and that is to list your high interest credit cards and loan first and the smallest interest rate loans last. List your smallest debts first followed by your largest high- interest debts( credit card) and then your largest low- interest debts( Lines of credit and taxes) . This is the best method but wares on you the most because it takes longer to see immediate results. STEP TWO- High Interest first.

You want to pay off the high interest first because those are the loans that are costing you the most each month. So why the high interest first? This is that debt that tends to stack up the fastest. Well as I mentioned in the step above, these credit cards and loans are costing you the most each month. The faster you can pay that off the better off you will be. This will help to motivate you and get that first success under your belt.

Now if you want to get things kicked off to quick start, you can pay off the smallest balance credit card or loan. STEP THREE- Move the payments along. For example, say you re making$ 75 payments to a small debt. When one debt is paid add the funds to the next debt. When the debt is cleared add the$ 75 to the next debt on your list. When that one is finished, take the$ 175 and add it to the next payment and so on. If the next debt had a minimum payment of$ 100, you will now pay$ 175 until it is paid off.

STEP FOUR- Save the cash! The best way to take advantage of your new situation is to use all the money you were spending on debts and start investing or saving it every month. Don t forget that when your debts are cleared you have set yourself up for a better financial future. Oh yeah wealth building! With this strategy your debts will clear faster meaning you will pay less interest, you will see progress as you clear small debts first, and you will not be tempted to use the funds for personal use instead of debt repayment.

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