3 Proven Strategies to Get Out of Debt Fast | St. Johns Bank
Debt can be a heavy burden. Whether you’re dealing with credit card debt or student loans, getting out of debt as quickly as possible is a great goal. But how?
It may seem overwhelming, but there are strategies to accelerate your debt repayment and regain control of your finances. By following a plan and sticking with it, the chances of getting out of debt sooner are far more likely than simply making the minimum payments or winging it.
1. The Avalanche Method. With this method, debt is prioritized by interest rate, tackling the highest interest rate first while making minimum payments on the rest. That way, the overall amount of interest paid over time is lessened. This method can save money in the long run.
2. The Snowball Method. With this strategy, you list all debt from the smallest amount to the largest, make the minimum payments and focus on paying off the smallest one first. Once that debt is paid off, you take the money you were allocating and add it to the lowest payment of your next debt. This increases your payment on the next one. Continue this process until each debt is paid. With the snowball method, you see your smaller debts disappear, and it feels satisfying to reach each goal.
3. Debt Consolidation. Debt consolidation is the process of taking out one loan, usually at a lower interest rate, to pay off existing debts with one payment. It can also reduce the total interest paid, saving money on interest rate fees. This method might not be the fastest, but it definitely simplifies it and can streamline the process.
Everyone’s journey is different, but it’s important to have a strategy, starting with a budget and then utilizing one of these methods. Having a set plan will also help with your stress and well-being. Knowing that there is hope and will, in fact, be an end to the seemingly endless payments.
We can help you learn more about budgeting, financial planning, and the right accounts or loans for your unique goals! Contact us today to get started on your debt-free journey.