Debt Snowballing – Debt Repayment Strategy

reduce debt repayments

Debt snowballing is a method of debt repayment that may be used to clear a number of debts together. With this method of debt repayment, the lowest debt is the one that is initially concentrated on and eliminated first.

Debt Repayment Strategy

The basic way of utilizing this method to reduce your current debts is as follows:

  1. List all of your debts, starting with the smallest and working towards the largest
  2. Commit to pay the minimum required on each of the debts every month
  3. Determine if there is anything extra you can pay off each month, this is then paid off the smallest debt
  4. Continue to pay anything extra you can afford off the smallest debt until it is cleared
  5. Then, use the minimum payment from the first debt plus what ever extra you can afford to pay off the second largest debt and so on until all of the debts are cleared

Theoretically, you will have more and more money to pay off the larger debts once the smaller ones have been cleared.

Psychologically, it is easier for people to stay motivated on clearing their debts if they continually have fewer bills, debts and loans to clear.

There are a number of alternative solutions to consider with regard to consolidating your debts. If you feel your debts have gotten out of control where you are barely making your minimum monthly repayments then talk to someone today.

Here at the Australian Lending Centre we have a dedicated team ready to assist you with your financial situation and offer a solution that will suit you, call us whenever you need 7 days a week on 1300 138 188.

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

jobseeker changes
Jack Richings

Jobseeker Changes Incoming…

The Government brought in financial incentives to help Australians through the COVID-19 crisis. However, from 25th September, jobseeker changes are coming in…

Read More
personal loans with no credit check
No Credit Check Loans
Jack Richings

Personal Loans With No Credit Check

Personal loans are a great cash injection. Do you want a quick & easy option with no impact on your credit score? Consider personal loans with no credit check.

Read More
Australian Economy 2020
Jack Richings

Australian Economy 2020

Bush fires, drought, flooding & the Covid pandemic have made 2020 a year to never be forgotten. But how has this affected the Australian Economy 2020? Find out.

Read More
what is debt management
Debt Management
Diane Challis

What Is Debt Management?

Ultimate Debt Management Guide – We discuss the difference between good vs bad debt & give tips on how to escape debt. Find out what is debt management here…

Read More