If your debt balances never seem to budge while making the minimum payments, it may be time to rethink your repayment strategy. Here are three strategies that can help you pay down balances faster and with less total interest.
1. The Snowball Method
If the idea of seeing your progress in a tangible way motivates you, then consider using the debt snowball method. In this strategy, you make minimum payments on all but your smallest balance, which you work to pay off first. Once you have succeeded, you can move on to paying the next larger one.
2. Avalanche Method
For borrowers without the need for extrinsic motivation, the avalanche payment method may work. In it, you make minimum payments on all balances, but then pay everything extra you can on the highest interest rate balance each month.
3. Debt Settlement
If you are already falling behind on payments and fees are starting to pile up, it may be time to look at hiring a debt settlement company, like Rescue One Financial. They can negotiate with creditors to get you out of debt quickly if you can commit to making the necessary payments.
Debt can derail future plans by negatively impacting your credit score and making it harder, and more expensive, to borrow. If you find yourself burdened with unmanageable payments, it is important that you know there are ways out and resources, such as Rescue One Financial, to help.