• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

National Debt Relief

National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Talk to a debt counselor toll free:

800-300-9550

Get Relief From Credit Card Debt

Medical Bills and Unsecured Loans

  • Apply Now
    • Qualifications
    • Is This Right For Me?
  • Proven Results
    • Debt Relief Benefits
    • Credit Card Debt Relief
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Login
HomeBlog Debt ReliefWhich Debt Repayment Strategy Would be Best for You?
Video Transcript

Free Debt Consolidation Quote

By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
  • National Debt Relief, LLC BBB Business Review
  • McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

Which Debt Repayment Strategy Would be Best for You?

April 20, 2016 by National Debt Relief

Man having financial problemsCarrying a big load of debt can have serious consequences. I will not only take a toll on you emotionally it can actually harm you physically. Research has shown that the stress related to debt can cause stomach problems, arthritis, high blood pressure, a spastic colon, bladder infections, fibromyalgia, asthma, headaches, and even heart disease. Fortunately, there are two proven methods for repaying debt. Choose one of the two and you could quickly be on your way to not only becoming debt-free but also getting rid of all that the physical and emotional stress caused by your debts.

The avalanche method of debt  repayment

If you choose the avalanche method for repaying your debts you will need to make a list of all of them – credit card debts, loans, student loans, everything – and then put them in order with the one that has the highest interest rate down to the one with the lowest. You then focus your efforts on paying off your debts in that order. This means first focusing all of your attention on the debt with the highest interest rate. Of course, you will need to continue making at least the minimum payments on your other debts. Why do some experts like the avalanche method? It’s because if you get rid of your most costly debts first you will save the most money.

The snowball method of debt repayment

This method of debt repayment was pioneered by the financial expert Dave Ramsey. It requires you to list all of your debts with the one that has the lowest balance at the top down to the one with the highest balance. You then focus all of your efforts on paying off that debt with the lowest balance – while continuing to make the minimum payments on your other debts.

Here’s an example of how this works. Let’s suppose you have the following debts:

  • Credit card debt A: $500, minimum payment $25
  • Credit card debt B: $1200, minimum payment $35
  • Department store credit card: $1800, minimum payment $42
  • Student debt: $5100, minimum payment $105

If you first pay off credit card debt A you will have an extra $25 plus the $35 minimum payment on credit card B to pay on that debt. Once you have it paid off you will have the $25 from credit card debt A, the $35 from credit card debt B and the $42 minimum payment on the department store credit card – for a total of $102 to pay on that department store debt. This means you should have it totally paid off in about 14 months and can then go to work on that student loan debt.

Why it’s called the snowball method

This is called the snowball method of debt repayment because the philosophy behind it is that every time you pay off one of your debts you’ll develop increased momentum to begin paying off the next one just as a snowball picks up speed as it rolls downhill.

woman tearing off debtWhich would be best for you?

Both of these methods can help you get your debts under control and paid off. So, should you choose the avalanche or snowball method? To pick one of the two you need to first understand your own personality. The bottom line is the one that you choose has to be a good fit. For example, the debt snowball method takes into account the behavioral and emotional aspects of personal finances. As you knock out that debt with the lowest balance it may be easier for you to stay on track because you got to a quick “win”. It does take hard work to pay off a large amount of debt and the debt snowball method could help you stick to your plan so you don’t get frustrated and overwhelmed by the process as you see you’re actually making progress

The debt avalanche method is better strictly from a mathematical point of view because it requires you to focus on the debt with the highest interest rate and pay no attention to its balance. Where the mathematics come in is that the debt avalanche method will save you the most money over the long term. However, if your debt with the highest interest rate comes with a bigger balance than some of your other debts keep in mind it will take you much longer to repay that debt. In other words, the debt avalanche method would not be a good choice if you’re the kind of person that requires fast results. On the other hand, if you’re high on self-discipline and don’t have a big need for instant gratification then the avalanche method of debt payment might be a better choice.

A debt consolidation loan

If you feel utterly swamped by your debt, then a better alternative might be to get a debt consolidation loan. If most of your debt is high interest credit card debt you might be able to transfer those balances to a 0% interest balance transfer card. There are cards available now that will give you as many as 22 months’ interest free. That might be enough time for you to actually pay off your balance before the interest charge kicks in.

If you have different types of debts like those listed earlier in this article a better option might be to get a debt consolidation loan. If you have equity in your home, you can get a home equity loan or homeowner equity line of credit. In mid January of this year the national average interest rate was about 5% for a $30,000 fixed-interest home equity loan. And in February you could get a 30,000 HELOC at an average interest rate of 5.2%. Add up the interest rates on your debts, divide this by the number of your debts and the odds are you’ll find your average interest rate is much higher than even the 5.2%. If you don’t own your own home but have good credit you should be able to get a personal loan and maybe for 10% APR. And that, too, should be much better than the average interest rate you’re paying on your debts now.

Trading money for time

A debt consolidation loan can be a good solution but it’s important to understand you would be trading money for time. In other words, you will have much lower monthly payments but the odds are your loan will have a much longer term, so you will actually end up paying more interest over the long-term.

Do you qualify for debt consolidation?

National Debt Relief
National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

Follow National Debt Relief: Facebook Twitter Instagram Linkedin

Primary Sidebar

Consolidate Your Debt!
Find out how NDR could help.
  • Get one low monthly payment
  • Avoid bankruptcy
  • Get out of debt in 24-48 months
Get Your Free evaluation
Free Debt Consolidation Quote
By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
 Trusted By Our Clients

"..."

Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/17/2021 Charlotte: I am calling because I wanted to ask a few quick questions about your experience with National Debt Relief [unclear 0:00:27]. JOSE: It’s good. Charlotte: Now before I begin, I have to let you know that our call is recorded. Can you tell me what actually made you decide to work with [unclear 0:00:40] National Debt Relief as opposed to other providers? JOSE: Good. Charlotte: What made you decide to work with National Debt Relief, as opposed to other debt relief companies? JOSE: Aside from your reviews, I’m guessing the success of the reviews. Charlotte: Tell me about the service and the program that National Debt Relief signed you up for? JOSE: I was able to collect all my debt into one chunk and then pay it off. Also was able to get settlements lower than what the balance was. Charlotte: How easy or difficult would you say the enrollment process was? JOSE: It was pretty simple. It wasn't difficult at all. Charlotte: Now is there anything about the process that you feel could have been improved? JOSE: Not at all. I think everything went smoothly. Charlotte: Perfect. Can you give me a little feedback on your experience with your negotiator? What did you think about your negotiator? JOSE: Negotiator was really firm and fair. Charlotte: Do you happen to remember the name of your negotiator by chance? JOSE: I do not, actually. Charlotte: Okay. Is there anything about that representative stood out [unclear 0:03:04] at all? JOSE: No, not at all. Charlotte: Perfect. How comfortable did you feel working with the negotiator through this process? JOSE: Very comfortable. Charlotte: Perfect. So if you had any questions or concerns, how did the negotiator work with you to resolve any questions or concerns that may have arisen? JOSE: At this point, I really didn't have any concerns at all. So, I mean, been doing a great job. Charlotte: Awesome. So if you were gonna rate your experience with National Debt Relief so far, on a scale of maybe one to five, and five would be that you would recommend to friends and one is you were pretty dissatisfied, how would you rate them? JOSE: Is 5 the highest? Charlotte: Yes, 5 is the very highest. JOSE: Okay. Then we’ll go with 5. Charlotte: Would it be okay if I posted your comments as a review on our public web site for National Debt Relief? JOSE: Yes. Charlotte: I will also send over a link so that you can have it as a record for yourself as well. And I have you at salvipride673@gmail.com. JOSE: Yes. Charlotte: How did National Debt Relief work with you as far as setting up a payment [unclear 0:04:45]? JOSE: They did pretty good. Like I said, I have no complaints at the moment. Charlotte: How comfortable were you with the amount that you were paying? JOSE: Very comfortable. Charlotte: Perfect. Now as far as your thoughts on the cost in relation to the quality of service you received at National Debt Relief, what would you say about that? JOSE: The service team was all right. Charlotte: Now if you were going to rate your experience on a one to five, five is that you would recommend to friends and one is you're pretty dissatisfied, how would you rate them? JOSE: 5. Charlotte: Perfect. Would it be okay if I posted a few of your comments to our website? JOSE: Yes. Charlotte: Now if a friend or a family member were asking you about National Debt Relief, what would you say? JOSE: Really great people to work with. Very quick and easy, very responsive, no issues. Really makes you feel like they’re there for you. So not a scam at all. Charlotte: Perfect. Now about where are you in the process at this point? JOSE: I've already had two creditors resolved already. Pretty happy about that. Charlotte: And of course, our call is recorded.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Jose Perez
ConsumerAffairs Reviews

Latest Debt Relief Posts

  • 5 Ways To Get Rid Of Your Debt This New Year
  • How A Minimalist Lifestyle Can Help You To Become Debt Free
  • Learn How To Send A Cease and Desist Letter To Creditors
  • Getting Out Of Debt: The Truth About Debt Reduction In 2018
  • How Bethenny Frankel went from Debt to Success (and a Skinny Girl Empire)
National Debt Relief, LLC BBB Business Review AFCC Top Ten Reviews Gold Top Consumer Reviews Consumers Advocate Trust Pilot
Company
  • About Us
  • Contact Us
  • Blog
  • Careers
  • Corporate
  • Privacy Policies
  • Terms Of Site
  • Disclaimer
  • Sitemap
Products
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Debt Settlement
  • Calculators
  • FAQs
Debt Resources
  • Credit Card Debt
  • Medical Debt
  • Personal Loan Debt
  • Unemployment
  • Divorce Debt
  • Retiree Debt
  • Veteran Debt
  • Business Debt
  • Personal Finance
Follow Us
  • Facebook
  • Twitter
  • Linkedin
  • Instagram
  • Pinterest

© 2021, National Debt Relief, All Rights Reserved.

Disclaimer
Disclaimer
Disclaimer