What is your personal debt reduction method aside the debt snowball method?

[Darker45]

I don't have debts at the moment. But I think the priority consideration in paying debts is to make sure those bigger ones won't accumulate additional interests for missing a payment. That would be risky. You might be buried in that debt. It may balloon beyond your paying capacity.

Those smaller debts, you can sometimes postpone the payment. You can also save small amounts daily so that when the due comes, you won't have to worry about it. You can probably even talk to the lender not to add additional interest if you only miss a month's payment or if you pay a partial amount. I doubt you can do the same to large debts.

[Yogee]

[....]
This approach worked for me, although I'm not sure if it falls under the debt snowball method.

It doesn't really matter if it falls under it or not. Heck I didn't even know there is a name or a method of how you pay your debt hehe. Just meet the deadlines and you should be able to clear all the debts in due time. Of course it would great if you don't incur new debts while paying off the older ones.

[wxa7115]

The debt snowball method is one of the most recommended strategies to get out of debt. How does it work?

You list your debts from smallest to largest and pay the minimum amount on everything except the smallest one. You prioritize paying off the smallest debt aggressively.

- consider selling off all the items you don't need.
- Consider working more jobs to increase your source income.
- Consider temporarily halting all investment, after which pour all your energy into paying off to the smallest debts.

By paying off the smallest debts first, the snowball effect kicks in and you move on to the next debt on the list until you pay off all of them. It is estimated that a person who follows this method religiously can become debt-free within 18 - 24 months.

However, the debt snowball method may not be effective if you have debts with specific payment dates that, if missed, could result in higher interest rates or a negative impact on your credit score. Nobody wants any of these.

Recently, I had some debts to pay and prioritized them based on urgency, regardless of their size. I had to pay them by or before the deadline. I didn't mind whether they were big debts or small debts. What mattered was meeting up with the deadline. This approach worked for me, although I'm not sure if it falls under the debt snowball method.

For those who have gotten out of debt more quickly, did you use the debt snowball method or another personal debt payment strategy that worked for you over the years?

It makes more sense to pay the debt that generates the higher interests rates each month, credit card debt is especially bad as if you get enough of it you could get to the point in which even making the minimum payments could become difficult for you.

Another option is to pay that debt by asking a new loan with a lower interest rate, as over the long term you will pay less money this way, that being said nothing beats never getting in debt to begin with, as with the exception of big purchases like a house or a medical emergency there is not really any justification to accumulate so much debt.

[dothebeats]

I finish off debts that ask for high interest per month, and move on to the next that has lower ones and eventually pay them off. Or better yet, before I even take out a loan, I'll check what the interest could look like every month before I sign the deal. That's why it also pays to have a good credit relationship with your bank since they are handing out loans that are quite favorable to their users that have a good credit standing with them. Right now I'm debt-free, though I had a year-long stint of having debts left and right after being hospitalized, and paying the ones with high interest are the ones I prioritized. After that, it's just smooth sailing from there.

Snowball method works if you have all the time in the world and is okay with paying some interests over time on some of the debts that has a fixed due date, but it's not very economical and might bite you in the ass in time.

[hugeblack]

The debt is more like a mouse trap, you get a large piece of side quickly, but the more late, the more the trap holds you, the greater the pain. Therefore, the smaller your debt and the fastest in payment, the better, the more late, the more revenues pay the costs of paying the debt with an amount that may be greater than the amount of the debt.

So you do not borrow except in the case of necessity and when you borrow, try to pay your debt first before you habit and drown in debts.

[xSkylarx]

I haven't had multiple debts, but right now I do have debts and other bills, but what I really do is pay them off online. There are due dates on them, so I should pay them on time when my salary arrives. The best solution to this really is to increase your income because that is your main source to solve it, like finding a side hustle or working more hours, anything that can earn money, because it is really difficult to get out of debt if you still don't have enough money.

[Bananington]

that being said nothing beats never getting in debt to begin with, as with the exception of big purchases like a house or a medical emergency there is not really any justification to accumulate so much debt.

Best way to deal with debts is to avoid debts. I know that debt can be sometimes unavoidable, but it's probably planning you can get things done. If you are getting in that it should be for a very reasonable for purpose and you should already have a plan on how to pay back the debt without it becoming a burden for you. If you become used to getting in debts very easily, over unnecessary things, it can be a consuming habit that will take a lot of discipline to overcome. With a habit of getting in debt, you will be exhausting any money you expect even become it gets to you.

[Wexnident]

For those who have gotten out of debt more quickly, did you use the debt snowball method or another personal debt payment strategy that worked for you over the years?

I didn't use any method (or maybe I did, I just don't really know the name), but I just tended to avoid incurring any debts as much as possible when I'm under one. Of the ones I'm in, I try to pay the one with the biggest interest rate first then slowly whittle it down from there. I never try to reduce the payments I pull out from my wages, It's always the same regardless of how many debts I have so that I can pay it a lot quicker, making me pay less in the long run. I frown upon trying to take debts under me, regardless of how beneficial they can be for me for now. It just doesn't sit well with me imo. Well things might change in the long run depending on how much I learn more about stuff like this, but for now? Big no no.

[Unbunplease]

Whether you like it or not, debts sometimes arise. Of course, most people have no desire to get into debt, but unforeseen circumstances can always arise. Before you take on debt, you need to assess how necessary it is. In order to pay off debt effectively, you need to restructure it properly. You can always find a bank with lower interest rates and better terms.

[livingfree]

If some of your debts are from the banks, you can talk to them and ask them to at least mitigate the interest so that it won't keep on rolling on. And explain to them that you need some adjustments with their interest rate so that you can pay them.

Most banks are considerate in terms of this situation so that the debt will be cleared from their customers. They get their initial money that's lent to you and at the same time they will still get interest from you.

The same goes to the personal lenders, I think it is not that much to talk to them and ask them when you're having trouble of paying it and just explain the situation so they can adjust and help you out unless they don't want any adjustment.

[TimeTeller]

I haven't had multiple debts, but right now I do have debts and other bills, but what I really do is pay them off online. There are due dates on them, so I should pay them on time when my salary arrives. The best solution to this really is to increase your income because that is your main source to solve it, like finding a side hustle or working more hours, anything that can earn money, because it is really difficult to get out of debt if you still don't have enough money.

One approach is check which one is incurring large interest. Better pay them first before you rack up those interest big time.
And then, as much as possible, don't borrow more money, better pay off all your debts first.
That means, live below your means, save as much money as you can, don't buy luxury items.
Stop yourself from buying impulsively. Once you clear your debts, you will feel better for yourself.

[hatshepsut93]

My debt reduction method is never getting into debt in my life. I save a large portion of my income and tap into my savings when I need to make a spending. Even if there will be a need for a big emergency spending, my safety net will cover it. From my point of view people should be avoiding debt as much as they can, but it seems like a lot of people do it without thinking and then end up with a headache for many years to come.

[Oasisman]

What is your personal debt reduction method aside the debt snowball method?

I have several debt from before and until now, it's not like I badly need the money, but I have to - just to increase my credit score and limit to make massive loans like business related ones that needs massive capital. That's my primary plan in taking this debts. In my own experience in paying these debts, I don't really have a method instead I pay them just before the due date and pay in advance for a month or two when I get to have enough money left from my monthly income and yeah I have to cut on my unnecessary expenses too when due date in approaching.
My method is simply get rid of penalties and struggles to catch up with debts beyond due.

[irhact]

My debt reduction method is never getting into debt in my life. I save a large portion of my income and tap into my savings when I need to make a spending. Even if there will be a need for a big emergency spending, my safety net will cover it. From my point of view people should be avoiding debt as much as they can, but it seems like a lot of people do it without thinking and then end up with a headache for many years to come.

While I also use this method to make sure I'm always debt free like yourself, I also have to reduced my expenses and concentrate on my needs first then whatever that's left after saving that's what I use to take care of some of my wants. I know I don't necessary need to do everything my body wants because I'll go broke doing so therefore I prioritize the important wants and let go of the others.

When you plan your life very well that you hardly get into debt like most individuals, people will think you have everything and that you're making lots of money but they don't know that you have your strategies that you use to keep yourself debt free like saving more to invest.

[xSkylarx]

What is your personal debt reduction method aside the debt snowball method?

I have several debt from before and until now, it's not like I badly need the money, but I have to - just to increase my credit score and limit to make massive loans like business related ones that needs massive capital. That's my primary plan in taking this debts. In my own experience in paying these debts, I don't really have a method instead I pay them just before the due date and pay in advance for a month or two when I get to have enough money left from my monthly income and yeah I have to cut on my unnecessary expenses too when due date in approaching.
My method is simply get rid of penalties and struggles to catch up with debts beyond due.

This is also my strategy, or being a good payer, because if you don't want extra fees on paying it, then pay it early, and you will be a good payer also, and you can have a loan again soon if needed. I don't have experience with credit scores, but I've read a lot of people that are really taking a loan or getting a credit card because of this, as there are a lot of promotions and discounts on it, but still, I am not that interested in this because it is still a loan that I don't need. The only thing that I want right now is to have someone or a corporation that I can easily take a loan from for emergencies.

[Renampun]

this method is quite good considering that we can pay off our debts in a more controlled manner and maximize the funds we use. we can avoid piling up debts and make debt more effective. Listing all of our debts will also make us more aware of our future ability to pay off these debts and take the necessary steps to increase income and settle these debts.

but for debt with accumulative interest, it's good to prioritize it first because from my past experience, I don't prioritize debt like this and in the end after calculating the total accumulated interest this is quite high too and can pay off some debts. so it's a good idea to prioritize debt with accumulated interest to be able to avoid ineffective debt payments.

[Litzki1990]

If you want to change your financial situation, you must first be debt free. If a person has debt then that person can never achieve financial success. If it is not very necessary then it is better not to take a loan. And if you are already in debt, try to pay off those debts. Paying off debt will require you to work harder where you are at work and make some lifestyle changes. That is, if you live a very good life before, you have to reduce the standard of living so that you can save money and repay the debt with that money. You will have no pressure when you are debt free. And then you will be able to enjoy your life in a beautiful way and will get a lot of financial prosperity.

[Inwestour]

Best way to deal with debts is to avoid debts. I know that debt can be sometimes unavoidable, but it's probably planning you can get things done. If you are getting in that it should be for a very reasonable for purpose and you should already have a plan on how to pay back the debt without it becoming a burden for you. If you become used to getting in debts very easily, over unnecessary things, it can be a consuming habit that will take a lot of discipline to overcome. With a habit of getting in debt, you will be exhausting any money you expect even become it gets to you.

Yesterday I watched a video about a businessman who took out a loan of 500k to develop his business and he claims that if he had the opportunity, he would take an even larger loan. I don’t know if this is a different way of thinking, or something else, but just the thought that I will have to repay such a debt becomes scary for me.

I understand that debts can be bad and good, but my upbringing does not allow me to think in such categories, I am also convinced that any debts are bad. Apparently, borrowed money can help you reach your goal much faster if you know what needs to be done for this and you only lack the financial resources for this.

[BitcoinPanther]

IMO the "snowball method" is complete junk. It's the reason why people are stuck in perpetual debt cycles.

Paying off high/compounding interest first is the only answer if avoidance of debt is unavailable. Interest rates/compounding interest are the reason people slip into debt. The payments become insurmountable. Factor interest rates with the total debt due, obviously. The interest rates of a 100k USD loan, while they may be lower, take priority over that of a 100 USD loan.

I also think the method you are stating is the best method in paying debt.  This is called Debt Avalanche method, this will lessen our losses due to high interest of debt.  In this method we prioritize the debt that has the largest interest rate.  See the difference between the two methods:

How do you define urgency? If you risk default on a particular debt which has a lesser interest rate than on another debt with a greater interest rate, would you take the debt of greater interest rate to be more urgent?

For me, it is the one that is in the nearest due and after settling that, I would prioritize the one with highest interest.  Defaulting on loan can give us more problem and extra interest, so prioritizing loan that is about to due is the best decision. 

[romero121]

My choice of debt reduction is using gold as collateral. When we use gold as collateral it is possible to get loan amount at a much lesser interest than that of the personal loans or out of other loans available. It ease out to pay the amount directly to the gold loan account, which helps with the easy completion of debts than going for borrowing and other property based loan schemes.

Even if we were unable to pay the settlement amount at the mentioned time period, it is possible to pay the interest and last the time period to settle the loan.