You may have a large credit balance with a high interest rate that has become difficult to pay off. The monthly charges have been eating up your minimum payment and the balance has been decreasing by a very small amount. Although experts argue that paying off the high interest rate debts first will help you save some money in the long run, sometimes it may not be the best approach, especially when you have large balances.
In this case it’s recommended that you start with the smallest credit balance first. With this approach you will be freeing up money. With each payment made the small credit or loan will reduce by a large amount. This means that it will be just a matter of time before you clear these. If the amount which is being repaid per month is large enough to clear one small loan, it means every month or two, a loan could be cleared.
This frees up money, ensuring that you have enough to pay off the larger amounts within a short time. With time all your debts will have been cleared and you will be debt free.
To manage your credit balances and eventually reduce them to zero will require sacrifice. This means that you have to cut some expenses so that you can allocate the cash towards clearing your loans. One of the golden rules is paying large amount towards each credit balance. This will allow fast clearance and a reduction in the interest charges.
To increase the amount available for payment, disconnect your Sky subscription, stop eating out, cut back on entertainment and reduce the amount that goes towards your phone and internet charges. You will then have enough to pay off your debt within a short time.
Sometimes you may find that even after taking these measures, your debt is still a challenge. If this is the case you may need to seek a financial advisor. This will help you to develop a debt management plan where you can formulate a plan and budget to reduce your debts.
If you’re committed to reducing your debt, by using the correct payment strategies you could be become debt free in no time!