Getting out of debt can be a challenging but rewarding process. There are a few different strategies that you can use to help pay off your debts and achieve financial freedom. Here are a few examples:
• Debt snowball method: This method involves paying off your debts in order of smallest to largest balance, regardless of the interest rate. To use the debt snowball method, you would:
• Make a list of all of your debts, including the creditor, balance, and interest rate.
• Order the debts from smallest to largest balance.
• Make the minimum payments on all of your debts except for the one with the smallest balance.
• Apply any extra money that you have towards paying off the debt with the smallest balance.
• Once the debt with the smallest balance is paid off, move on to the next one on the list and repeat the process.
• Debt avalanche method: This method involves paying off your debts in order of highest to lowest interest rate, regardless of the balance. To use the debt avalanche method, you would:
• Make a list of all of your debts, including the creditor, balance, and interest rate.
• Order the debts from highest to lowest interest rate.
• Make the minimum payments on all of your debts except for the one with the highest interest rate.
• Apply any extra money that you have towards paying off the debt with the highest interest rate.
• Once the debt with the highest interest rate is paid off, move on to the next one on the list and repeat the process.
• Debt consolidation: This method involves taking out a new loan to pay off multiple debts, resulting in a single monthly payment. To consolidate your debts, you would:
• Gather information about your debts, including the creditor, balance, and interest rate.
• Shop around for a consolidation loan with a lower interest rate than the combined interest rate of your current debts.
• Use the consolidation loan to pay off your current debts.
• Make the monthly payments on the consolidation loan to pay off the debt.
It’s important to note that these strategies may not work for everyone, and there is no guarantee that you will be able to get out of debt.
*We are not financial advisors and only present our findings. Please do your own due diligence and what you feel you can make work in your own unique situation.