There are a number of debt repayment methods available for those who want to tackle their personal debt. When I paid off over 15000 in one year, I did my research on the debt snowball vs avalanche method, eventually coming up with my own personalised plan.

Coming to terms with repaying your debts in full is daunting. On a personal level, I was apprehensive about facing my debts. I knew who I owed money to, however, the figuring out the amount was more difficult. It was always a ballpark figure in my head. Part of the reason I’ve personally never dealt with my money problems is that I was actually afraid to know exactly how bad things have gotten. I needed to figure out some information on Debt Repayment Methods.

Debt Repayment: Getting Started

List everything you owe on a piece of paper. I mean everything. Include the amount, the interest rate, the date that the debt is due for repayment (if applicable) and anything else that might be relevant.

Once your debts are listed, you can easily re-jig your debts by:

This means you can figure out a debt free plan; decide what order is best to tackle your debts in. If family and friends should be repaid first, then that’s what you focus on. If you want to cut down on interest whilst tackling your debt, then focus on eradicating your high interest debts first.

The Debt Snowball vs The Avalanche Method

A question many people ask is, What are the advantages and disadvantages of the debt snowball and debt avalanche methods? So here they are in more detail below.

The Snowball Debt Repayment Method

I used this method in my personal debt pay off journey. It was a fast debt pay off method. It is very similar to the Avalanche. What is the difference? It is focused on your smallest outstanding debt. Throw every extra money towards that smallest debt whilst continuing to pay your minimum debts. Finally, continue this process until you achieve a fast debt payoff. I promise you this method is addictive. You will be on such a fast train. This momentum enabled me to pay off €15027 of debt in just 12 months.

The Avalanche Debt Repayment Method

This method is great if you want to focus on paying back less interest. This will saves you money, but it can be frustrating to create momentum. You start with paying back any extra income or savings made throughout your budget on the highest interest first. You continue to pay back the minimums on all of your other debts. It is not the fastest debt repayment method, but it can be just as satisfying. When the debt is paid off, you roll over that repayment on the amount to the next highest interest rate, and so it continues.

Emotional Debt Pay Off Method

One of the reasons we don’t like debt is you are master to the lender. Simplified, the emotional debt payoff method might not make sense to many, however, money is one of the main causes for family disputes. It was Ellie from Planning and Finances that brought this idea to my attention. If you feel that owing money to your friends and family is stressful. Why not remove that tension so you can figure out your next course of action? I think emotions play a huge part in our decisions making process. Once they are removed, you can tackle debts using the debt snowball or debt avalanche method as normal.

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Let me know in the comments below what debt pay off method you have decided follow, and if this blog was helpful in making your decision.

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