sooner if you make more than the minimum
monthly payments.
McClary suggests using online debt calculators
or tools to estimate your debt-free date. “You can
test out strategies of adding different amounts
to the minimum payments to see how quickly it
would pay off.”
If you’re unable to pay beyond the minimum
on multiple debts right now, it’s OK to tackle
it one at a time. There are two main methods
for prioritizing repayment: debt snowball and
debt avalanche.
With debt snowball, you pay extra on the debt
with the smallest balance first, while making
the minimum payments on others. Once
you’ve erased that debt, roll the amount you
were paying into paying off the next-smallest
debt, and repeat. With debt avalanche, you
focus on the account with the highest interest
rate first.
“The avalanche, where you attack the highest-
interest rate debt first, usually makes the
most logical sense. It’s the best from a math
standpoint,” McDermott says. “The one
disadvantage to that: It can sometimes be
hard to feel like you’re making progress if that
particular card is really high.”
Which method is right for you? Pick the one that
you’re going to feel more motivated to stay on
track with, McDermott says.
EXPLORE WAYS TO DITCH YOUR
HOLIDAY DEBT FASTER
Here’s what you can do to speed up the debt
repayment process: