In this modern era where money is one of the main sources of motivation for people, we are always aiming for a better lifestyle and improvement in our standard of living. Human needs are unlimited because of the unchained desires. With a limited source of income, it is not possible to fulfill all your needs. However, there are options. You can opt for a loan and chase your dreams. But, after you have enjoyed the fruits of your loan, repaying this debt can be a real problem.
However here are few ways you can pay off your loan quickly and without too much trouble. Here are some strategies for paying off your debt fast:
Debt Snowball is the most popular method for faster repayment of debts. You have an alternative to choose among two roads that lead to the same destination. You can choose to pay off the smaller debts first or you can pay off the debt with greater interest first, the choice is yours.
Be a little analytical and arrange your debts in order. Keep the high interest debts at the top of the list. You, then need to cut down a little bit on your expenses and push that extra money into the debt having the highest rate of interest and continue paying the minimum amount for the other debts. The more you can cut down on youe expenses, the faster you can pay off the debt with highest interest. This in turns saves some of your money that you could have paid away as interest. And continue doing this for the rest of the debts. In this way, though the monthly income remains the same, the contribution towards debt repayment increases.
Stressing on emotional satisfaction, David Ramsey along with others advise paying off some smaller debts first. They stress on the fact that this emotional satisfaction can actually keep you motivated to continue paying off your debts.
Others, who do not believe in David Ramsey’s theory, came up with the previous logic of paying off those debts first which have very high interest. They opine that, clearing off these high interest debts first can actually save some money. This group does not ignore the fact that there can be some family debts which you need to repay with utmost priority, just to avoid family tension but generally the stress lies on high interest accruing debts.
With a need to live a healthy and hassle free life, we must always strive to meet our end needs with the limited resources at our disposal. However, if this is not possible then its best to plan for loans and debts, including a strategy for paying off your debt fast.