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Pay off debts with the debt avalanche method

If you have incurred a huge amount of debt load and you cannot arrange your monthly payments every month, then you can seek help of the debt avalanche method to pay off debt. This method of paying off debts is almost similar to the snowball method but it differs from it with one small and important detail. With the debt avalanche method, you can pay off your debts faster and pay less interest rate to your banks or lending institutions. Read on to know the steps of repaying your debts with the avalanche method.

1.Order your debts from highest interest rate to lowest: You may have been handling multiple credit cards and if it is, you need to order your debts according to the highest interest rate to the lowest. Watch out for promotional rates ending which they may do on the date promised when you enrolled or earlier than that. Also note that if your credit improves, it will not lower your interest rates magically. Order your lists from the highest interest rate to the lowest. This way you can pay off debt faster.

2.Pay the minimum amount to all debts every month: Make a list of all the minimum monthly payments due on all your credit cards. This is the amount that you need to pay towards each debt except for the one that has been listed on top. Also make sure that you make a list of the due date if it is relatively static from month to month. Your payments should always reach the credit card company within the due date.

3.Send all available cash to the debt with the highest interest: If you have got an emergency fund, then take help of it. Withdraw money from your emergency fund and try using that money in paying off the highest debt amount. Try to save money from your monthly income and try paying off debts. All the cash available should be dedicated towards the account with the highest interest rate.

4.Repeat this every month: Once you are able to pay off an entire account, repeat this process every month. Again make a list of the second account with the highest interest rate and start putting in all your efforts to eliminate that debt too.

This avalanche method is mathematically the best method of paying off your personal debt. No other method can get you out of debt and save your money at the same time. Thus follow the above mentioned steps to pay off debt and lead a stress free life.

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    14 Responses

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    1. Katie says

      On a debt management plan we renegotiate your monthly unsecured debt payments down to a level you can afford

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    2. Lawrence20Nicole says

      That is perfect that people can receive the loans and it opens completely new opportunities.

      [WORDPRESS HASHCASH] The poster sent us ’0 which is not a hashcash value.

    3. YangFrieda says

      The loans suppose to be important for people, which are willing to organize their own career. As a fact, that’s not very hard to receive a term loan.

      [WORDPRESS HASHCASH] The poster sent us ’0 which is not a hashcash value.

    4. RACHAELVazquez says

      I received 1 st mortgage loans when I was 32 and this aided my relatives very much. However, I require the car loan over again.

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    5. HudsonDesiree23 says

      I would like to propose not to wait until you earn big sum of money to order goods! You can take the loans or college loan and feel fine

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    6. AIDAFLEMING says

      One admits that our life is not very cheap, but some people require money for different stuff and not every man earns enough cash. Therefore to get some business loans and collateral loan would be good solution.

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    7. AdaTyler says

      Many social crusaders, meaning well enough, have asked the government to ban payday advances. They paint a situation in which individuals get hooked into a horrible loan until payday because they are desperate. Then an awful spiral of debt begins, and eventually the person is left penniless. The motivation to borrow money is never talked about. The middle class is certainly beset with burdens, that is for sure. That said, banning credit cards would do far more good.

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    Continuing the Discussion

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    7. more info linked to this post on July 12, 2012

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