The Blog.

How To Eliminate Debt Fast .

How to eliminate debt fast. 

Debt is a stressful situation. If you find yourself in this predicament, staying positive and open-minded when looking for ways out of the red zone is important. Many debt management companies offer debt support services for people who need help with their finances. In this blog post, we'll discuss some solutions for getting out of debt... fast!

The Snowball Method

The snowball approach popularised by Dave Ramsey, a financial advisor, author, and radio host, states that people attempting to reduce debt should aim for 'quick wins,' such as paying off the smallest debt first. The technique is based on the idea that individuals should work their way down the list, starting with those debts with the lowest amounts owed and working their way up to more significant balances. The snowball grows in momentum and speed as it gets larger. It's a valuable strategy for reducing your debt(s).
  • Make minimum repayments on all debts
  • Make extra repayments on the smallest balance until paid out
  • Repeat this step with the following small debt until all debts are paid

The Avalanche Method

While you're rolling your snowball to fight debt, others may opt for the avalanche approach. This technique suggests that people should tackle their debts with the highest interest rate first and then work down from there. The goal is to target high-interest debt, most likely costing you the most money in interest payments. If you have two debts with the same interest rate, prioritise paying off the one with the larger outstanding balance.
  • Make minimum repayments on all debts
  • Make extra repayments on the debt with the highest interest rate until paid
  • Repeat this step with the subsequent highest interest rate debt until all debts are paid

The Hybrid Method

If you feel like both of these approaches are too extreme, there's also a hybrid approach that tackles the debts with the highest interest rates first and pays off smaller balances simultaneously. This method seems like a more straightforward approach because you're attacking all of your debts at once.
  • Make minimum repayments on all debts
  • Make extra repayments on the debt with the highest interest rate and the smallest balance until they both paid
  • Repeat this step with the next highest interest rate and smallest debt owing until all debts are paid

Additional Options

An additional option also available is Debt Consolidation which can be an effective solution for individuals experiencing debt problems. It's the act of taking out one loan to pay off all your other debts, which can help you save money on interest payments. When consolidating debt, it usually makes sense to take out a personal unsecured loan. It may also work for you if you have a home loan consolidating and refinancing all of your debt into one payment.

Talk to My Peace of Mind

Debt can bring even the most positive people down, so it's crucial to remain committed throughout the entire process, no matter what type of approach works for you best. There are several options available; choose one that best meets your needs. If you're unsure how to begin or overwhelmed, contact a debt negotiation business (like us) to see what assistance they can offer.
Enquire Now

ABOUT THE AUTHOR

My Peace of Mind

My Peace of Mind provides Debt Negotiation Services that assists individuals who are struggling to repay their debts. We offer short term, long-term or immediate solutions tailored to your individual circumstance that's affordable for you and works for your creditors.