Be Strategic about Debt Repayment

If you have significant debt, you need a calculated strategy to tackle your balance. Start by making a list of all your debts and write down the following details:

Interest rate

Total balance

Minimum payment

Number of payments remaining

Decide whether you want to use the snowball or avalanche method. The snowball method involves paying off the lowest balance first, no matter the interest rate. While this method may seem counterproductive, some research shows that it may motivate people to stick with their debt payoff plan. Once you have paid off the smallest balance, use the amount you were paying on it and add it to the next smallest loan or credit card balance. Rinse and repeat until you’re debt free. 

The avalanche method says you should pay off your balance with the highest interest rate first, no matter the total balance. Using this strategy will help you save the most on total interest.

Choose the method that appeals to you the most.