Debt Reduction Methods:
Method One: This is where you pay off debt starting right from the lowest outstanding balance to the highest. Here's how it works. Create a list of your debt accounts from lowest to the highest balance. Pay the minimum on all your debts. Make extra payment towards the lowest debt balance.Once you pay off the smallest bill, start paying extra towards the next higher balance and repeat the same for all your bills.
Method Two: This is a reduction plan in which you start paying off high interest debts first and then move on to the ones having low interest rate. Here's a step-by-step approach.List your debts in order from the highest to lowest rate.Pay the minimum towards each account.Make extra payment towards the highest interest account.Once the highest interest debt is paid off, start paying extra towards the account with the next higher rate and repeat the same for other accounts as well.
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Updated On: 12.02.28