How do I begin paying off debt?

Forum|Forum|7 years ago
March 14, 2019
4 replies
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I’ve researched all my options and it’s time to begin paying off my debt once and for all. I don’t even know how to go about that! Any advice or suggestions?

NCPERSON1

- line all the debt up from highest interest rate to lowest. While you want to make the minimum payments on all the debts, any extra money should ALL go to the debt with the highest interest rate first.

- you may want to talk to a community self-help group (check at your local library) on taking classes on basic personal budgeting. Getting debt under control is a function of getting spending under control

Scuwap

While some say highest interest rate first. I did lowest to highest amount. I have paid off 3 credit cards, my car, and will have my student loans paid off before I graduate. The motif to this is behavior and a budget. If you see this progress (paying off the small debt) you will continue to make progress onto the next debt. So on and so on. However, my girlfriend and I have picked up a lot of sidework along with our full time jobs and every little bit of extra has went to debt. Hope this helps!

NCPERSON1

But at the end of the day, you would have paid more money to pay off the debts by not addressing the debts with the highest interest rate fist

Scuwap

Well sure if you want to look at it that way. However, like I stated this is for behavioral purposes not math. Once you see progress (pay off your first small debt) you are more motivated to continue to pay on your debts instead of paying and paying and paying on a debt you only see minimal progress on. I’m sure it works both ways just giving my insight on what worked for me.

Gc2121

I don’t wanna finance. My debt is not much I just want to pay it all off at one time and be done. How do I do that?

NCPERSON1

Just write out a check for the total balance due and mail it in . If the total balance is not on your statement call the lender and ask

simple

AdrianG001

No matter what kind of debt you are in it may take years and meticulous planning to have it settled. But, there are some strategies you can make use of to clear your outstanding dues.

Snowball method - List all of your existing debts such as personal loan, credit card etc. and divert all the excess funds towards settling the smallest debt first. Then move on to the next debt and gradually you will be able to clear off all your debts[1].
Take up an additional job - you can turn any of your hobby such as teaching, writing, driving etc. into a part-time job to pay off your outstanding.
Cost-cutting - maintain a monthly budget and stick to it. The extra funds can be used to pay off the loan by having their EMIs increased by a small percentage say 5% every month. If you evaluate this yearly this turns to a big amount which can have your loan sorted out.
Negotiation - if you find the interest rates on your credit cards are too high you can call up your Relationship Manager and have the rates negotiated or eliminated. This will help you to lower down the EMIs on the card and settle the debt faster.

Regards,

Adrian