How to pay off your debt
Everyone keeps preaching that you should pay your debts – but no one ever explains how to do it. Here, are the most common debt repayment methods.
With this method you pay your smaller debts first. Psychologically, this method works well – because there is a real sense of achievement when you can square up an account, close it and move onto the next one.
With this method, you pay down debt with the highest interest rate first. You’ll save money in the long run by keeping interest charges under control.
- First pay the minimum payment on all of your debts.
- Secondly, put any additional money toward the account with the highest interest rate. Then continue to do this until the high-interest account is paid off.
- Thereafter, take the minimum payment you were paying on the first debt, as well as any additional cash, and put that toward the account with the next-highest interest.