It doesn’t matter how you got into debt. What matters now is leaving the negative marks on your credit history behind. How to do this? The debt avalanche method can be a solution.

See the review below and find out how to apply this method that has already saved many families from being “covered” by debt. Understand below!

Many people “freeze” when faced with a pile of debt. Even if they have the resources to pay for part of them, they may have doubts about where to start and whether they are making the best choice.

Well, the debt avalanche method gives order so that you can overcome your debts through a simple strategy to understand and put into practice.

In this method, the prioritized accounts should be those that incur the highest interest rate. We know that high-interest rates are the “growth factor” of debt.

Thus, by fighting them, it is possible to settle your debts by controlling them so that they grow as little as possible. However, like any method, this one also has advantages and disadvantages. Check it out below.

Many finance and debt settlement experts point to this method as a simple way to pay off debt. Anyone with any level of training can apply it. You won’t need to buy software, do the math, or study difficult concepts.

This is certainly a big advantage of this method. In addition, some trials claim that, in general, the avalanche brings better results than other famous methods, such as the “snowball”.

However, that doesn’t mean that the avalanche method will always be best for you.

Before choosing your strategy, comparing the methods and evaluating the most suitable for your profile is always important.

But, if you are in a hurry or don’t understand how to evaluate each strategy, choosing the debt avalanche method will never be a wrong decision.

In a simple step-by-step, find out how to apply the avalanche method and say goodbye to your debts!

Write down all your debts on a piece of paper or a spreadsheet. In columns, it informs the interest, the total amount of the debt, the minimum monthly payments, and the issuer of each.

To make sure you do not forget anything, check your credit history. Here is a short list of types of debt you should consider:

Now it’s time to organize all your debts, regardless of type, in terms of interest rate. Put the debt with the highest interest rate in 1st place, regardless of other criteria.

Then write down the debt with the second highest interest rate and repeat this process until you pay off all your debts.

In the end, all your accounts will be in descending order of interest rate.

Now it’s time to start executing the debt avalanche method itself. The idea here is to make the minimum payments on each debt.

After this process, the entire amount to settle excess debts must be invested to pay off the debt with the highest interest rate. Repeat this process until the 1st debt is fully paid.

Then do the same for the second debt, the third, the fourth, and so on. Just stop when all your debts are gone.

Have the downsides of the debt avalanche method put you off using it? It’s okay. That’s not a problem.

In fact, you can still find other alternative methods to pay off your debts strategically. Next, learn about 4 other methods in addition to the formula presented.

Like the avalanche method, this tactic organizes your debts to be paid. However, the listing criteria used here are different.

In the snowball method, you should start by paying off the smallest bills first, ignoring interest rates.

The feeling of having less debt every month will keep you motivated enough to follow this method.

In practice, with this strategy, you will apply for a loan that covers the amount of all your debts.

Thus, instead of paying each bill individually, you will only pay the installments of your loan.

This method can be even more advantageous if you close a loan with a low-interest rate.

If this method interests you, we recommend checking with banks and credit unions to compare rates and terms.

If your credit score is not good or excellent, you may not be able to negotiate advantageous terms on a consolidation.

In some cases, you may prefer to enlist the help of a debt settlement professional. He can evaluate and combine methods and find the best strategy for your situation.

In some cases, it is possible to find consultations with non-profit companies. These professionals can also negotiate better terms on debt consolidations or with the companies you have debts with.

Several credit cards offer 0% APR periods (usually 12 to 21 months). In other cases, it is possible to find cards with low-interest rates. So you can transfer your debts and turn them into your credit card balance.

Indeed, the main advantage is being able to pay them in monthly installments without interest. Thus, this is one of the best ways to pay off debts.

However, only people with good or excellent credit scores can access cards with 0% APR periods.

We have already written an exclusive article about balance transfer on credit cards. To understand the advantages, disadvantages, and how this method works, access the post below and say goodbye to your debts!