by Brad Homer
If you're like most people you have a few debts you'd like to get rid of and are interested in doing this as quickly as possible to save yourself as much money as possible. One of the most effective ways to accomplish paying off your debts quickly is to create a rapid debt repayment plan. Creating a rapid debt repayment plan involves a few simple steps:
1. Make a list of the debts you want to pay off, in the order you want to pay them off.
Some people like to order these by interest rate, with the highest interest rate debts listed first - to be paid first. Other people like the perceived psychological advantage of prioritizing their debts by balance, small to large. This is part of the debt management plan used when doing a 'debt snowball'. A debt snowball plan helps some people to keep motivated on their debt repayment goals by giving reinforcement (paying off more credit card or other debt bills) more quickly in the beginning.
2. Total the current monthly payments you're making to each debt account.
3. Each month, pay your bills as usual, but at the fixed payment amount you've set initially (i.e., don't reduce your payment each month to match the minimum due.) When a credit card or other debt is paid off, apply the monthly payment you were paying to the top priority debt remaining on your list. Continue this debt management strategy until all your debts are paid.
Again, prioritizing by interest rate will save you the most time and money overall, but putting a few small debts at the top of your list, regardless of interest rate, may give you the extra little psychological boost you need to stick to your rapid debt repayment plan. As you can see, the concept behind a rapid debt repayment plan is quite simple and effective. It can eliminate years and months of making payments to your loans and can save you many thousands of dollars in interest. It is a primary tool you can use to achieve your debt management goals.
You can create a rapid debt repayment plan now online using the free debt management wizard.