Best strategy to pay off debt? Here’s how to do it!

Date Posted: July 17, 2022
By: Maggie Marques

Struggling to pay off debt? Have you been riddled with your mortgage and credit card balances plus your student loan? It can be discouraging when you have been trying to pay the minimum amount and yet it seems that your debt isn’t moving.

Before you give up, know that you can repay your debt and be financially stable if you start doing these steps now:

Pay off the debt with the highest interest. This is painful but it must be done. Bear in mind that the higher the interest, the bigger the money loss. The longer you keep putting this off, the longer you will keep on paying for interest without creating a dent in your principal loan.

Pay on time.  Late fees may seem small but if you add everything up, it is still money wasted that could have gone to your debt repayment instead. Penalties and late payments will not be a good reflection when it comes to your credit score as well.

Every extra dollar counts. If you are able, try to add to the minimum payment requirement. This will help you save money by repaying your debt earlier and it will also lessen the total interest repayment you make for your loan.

Consolidate your debts. If you have multiple credit card debts, you can choose which card can give you the lesser rate when you consolidate your debts. This way, you don’t have to worry about having multiple due dates and you can only focus on one repayment scheme.

The bottom line is that every extra dollar towards your repayment counts. The goal is for you to be debt-free so even if you can’t afford to repay the debt with the highest interest rate first, then pay off the smallest debt. The important thing to do is to start repaying.

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