Paying Off Debt

Have you made the right decision to pay off your debts and finally feel free? It’s often a question of making some adjustments and getting a good game plan to see our wishes come true.
These guidelines will help you pay off your debts faster!

Be sure to reduce the interest rate on your loans.

The higher your interest rate, the longer it will take to repay your loans.
Take the example of Stephanie, who accumulates balances of $ 10,000 on different credit cards bearing interest at 20% per year. With a payment of $ 250 / month, it will take Stephanie 6 years to reimburse her balances.
With other types of loans at lower rates, Stephanie will be able to settle her debt much faster by keeping the same monthly payment and thus be freed up faster and save a lot of money:
To reduce interest rates, start by listing your debts, noting the balance, and the applicable interest rate. Then assess whether you could reduce the rate for each.
To reduce the interest rate, it is either a question of changing the type of loan or making balance transfers if you already hold cards or margins at advantageous rates.

Increase your payments as much as possible, taking into account your budget.

Imagine how good you will be once the debt burden is behind you. Do you want it to be as quick as possible? Make some compromises and go to TURBO mode!

Determine the maximum periodic payment you can afford by doing a quick analysis of your budget:
  • Start by taking note of your total net income
  • Then, take note of your financial commitments and your essential expenses (ex: taxes, heating, insurance, car payment, groceries, drugs, etc.)
  • Do not immediately take into account optional expenses such as restaurants, clothing, and leisure.
  • Evaluate your room for maneuver, then determine up to how much you could put per month to accelerate the repayment of your debts
  • Complete your budget by adding the optional expenses you want (e.g., gym subscription, basic clothing, etc.)
  • Make sure your budget remains balanced to avoid having to use your credit cards to make ends meet

Choose your repayment strategy.

There are two strategies for paying off credit card balances, the avalanche or the snowball. Here is a brief overview of these two methods:


pay off the card with the highest rate and balance first, make the minimum payments on the others during this time.


pay off the card with the lowest balance first, make the minimum payments on the others during this time.
These two methods have been proven and are very effective, both. It is, therefore, a question of choosing the one that will best suit your personality, to boost your motivation!
From a mathematical point of view, we favor the avalanche method because it is the one that will ultimately ensure you pay the least possible interest.
However, some people feel more motivated with the snowball method, which allows them to see their balances fall to $ 0 quickly at the start. If you recognize yourself, then the snowball method is for you.

Set a stimulating goal.

When you have chosen the project that motivates you, find an image that represents your goal, print it, and write on the sheet the project that you want to achieve. Then put this document in a place where you will see it often.
Visualizing a concrete goal is a potent technique when it comes to motivating yourself to do something that you find difficult.

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