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Snowballing Debt Repayments
Do you find that your debts are out of control? Do you live in dread of another phone call from the debt collectors looking for another payment? Is your current financial situation too much for you to control? Then you need to take action now!
There is an efficient process called Snowballing that is the very best way to address your outstanding debt problems. In this article we'll lay out what you need to do in order to prepare for repayments and how to prioritize your repayment schedule.
- Organize Yourself
- Before you start to repay your debts you need to organize yourself first. Move any credit card debt onto a free balance transfer card. Collate all the information and statements that relate to your outstanding debts. Draw out a list of yor debts and what the minimum repayment is per month. Also include details on interest rates per debt.
- Prioritize Your Debt Repayments
- Now that you have a list of your debts you should be able to see which debts are costing you the most. List the debts with the most expensive first. Now you can clearly see what debt is costing you the most.
- Keep Up Your Minimum Payments While Overpaying Top Debt
- This is the essence of Snowballing. Keep up your repayments to the smaller debts so that you don't run into any problems with your credit score. Now start paying as much money into your most expensive debt until it is cleared.
- Repeat Until Debts Are Payed Off
- Repeat this process until you are debt free. Snowballing saves time, gets you organized and lets you see the light of the tunnel.
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