If you’ve decided to begin paying off your debts, it can be difficult to decide which loans to pay off first. Here’s how you can prioritize:
Do you have credit cards with high interest rates? One way to get rid of debt would involve paying off those debts first, even if they have higher balances. It might take longer to be able to close out one of your accounts, but you’ll save a lot more in the end, by eliminating the debts with the highest APR first.
If you’re dealing with many different monthly bills, and paying all of the minimum payments each month has become overwhelming, another popular approach for getting rid of debt is to eliminate smaller balances first, and work your way up. This can be a good method if your loan APRs are all generally the same, or if you don’t have any credit cards with high interest rates.
Stick to your plan
The key to effective debt elimination is making a plan and sticking with it. Although it’s important to pay more than the minimum payment to eliminate debt faster, paying too much each month can leave you short on the money you need to take care of your other bills. Once you set your plan in place, stick to it until there are no payments left, then continue onto the next account. Keep going until all or most of the debt is gone.
Are you in debt and you need cash to catch up on bills? If you’re receiving annuity or structured settlement payments, Peachtree Financial Solutions may be able to get you that money upfront. This is done through a process known as settlement funding. To learn more about how you can sell some or all of your future payments to receive cash now, contact us today!
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.