If you went a little overboard this past holiday season or didn’t create a budget at all, you may find yourself looking at your credit card statements wondering how you're going to manage to pay off everything. Fortunately, there are a few methods that you can use to help get your debt under control. Here are four methods for paying off debt.
Popularized by Dave Ramsey, this method has you start small and end debt free. Make the minimum payments on all your debts except the smallest, this is where most of the money you have budgeted toward debt should go. Once you get the smallest paid off, move to the next, and so forth until you build to your largest debt.
Unlike the snowball method where you start small, with the avalanche method, you go big. Start with the debt that has the highest interest rate. This option may help you save more money over time not having to pay that interest.
Consolidation is when you combine multiple balances into one loan from a single lender. You will be issued a loan that you can then use to pay off your other debts. There are many loan options available and we will help you find the option that works best for you. Often at a much lower rate, these loans have a fixed, monthly payment over a set period of time that usually lasts two to five years.
If you feel you’re in too deep and need some help paying off your debt, a debt management plan may help. With this, you’ll receive a plan from a nonprofit credit counseling agency that includes a structured road map to become debt free in three to five years. Going this route will not impact your credit score like filing bankruptcy