How to pay off your debt
Everyone keeps preaching that you should pay your debts – but no one ever explains how to do it. Well, here are the most common debt payment methods – if your debt is affordable, you are not skipping payments and you are not taking from Peter to pay Paul.
Here, 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.
If you are skipping payments and feeling overwhelmed by your debt, then the best thing to do, would be to contact a registered debt counsellor who can:
- Lower the interest rates on your outstanding debt.
- Lengthen your repayment term.
- Consolidate your debt repayments to one lowered monthly payment.
- Free up money in your budget so that you have more money left for necessities.
- Protect you from harassment by debt collectors.
- Secure your assets against repossession.
- Give you peace of mind.
Everyone is struggling. No household has been immune to the effects of Covid and lockdown.
If you are feeling uneasy about your financial situation – then please contact us for a free debt assessment to determine if you are over-indebted.