1. Pay off the Most Expensive Loans First
A key to the achievement of any goal is building a thorough plan and sticking to it. That’s why the first step is to make a yearly plan for paying the debt. This means that you need to set up some goals each month regarding how and on what you spend your salary.
To pay the debt faster, there has to be some wavering. You will need to cut off some things. These include going to restaurants, or movies in order to save extra money for the debt. Do some cuttings here and there. Make a plan for each month, and save that money to pay the most expensive loan you have first.
Determine which credit card has the highest interest rate by looking at the interest rate portion of your bills. Then, focus on paying that debt off first. Then, to reduce your overall costs, keep paying off the loans with the following highest interest rates. This debt repayment strategy is also known as the “avalanche method.”
Another very popular strategy is the debt snowball method. This one is totally different than the avalanche method. So, instead of paying the most expensive loans first, you pay off the card with the smallest balance first. After you’ve paid off the entire amount, you take the money you were paying off that loan and apply it to the next lowest balance.