Best Accelerated Debt Elimination Technique

The best accelerated debt elimination technique depends on what you are trying to accomplish. There are actually quite a few accelerated debt elimination techniques available. However, the primary difference between each accelerated debt elimination method has to do with determining:

  1. Which of your debts should you pay down first?
  2. How much should you- pay toward your principal balances?
  3. How frequently should you make principal payments?

In his book The Total Money Makeover, Dave Ramsey provides some of the best accelerated debt elimination techniques available. He argues that it's better to list your debts from the lowest balance to the highest balance and then pay them off in that same order. This is called the snowball accelerated debt elimination technique.

Others argue that the better method is to list your debts in the order of the highest interest rate to the lowest interest rate and then pay them off in that same order. This is called the highest interest rate accelerated debt elimination technique.

The benefits, of the highest interest rate accelerated debt elimination technique, are you incur less interest in the long run and you get out of debt faster. By paying the principal on the highest interest rate loans first you eliminate more interest faster.

However, if you believe you will have trouble staying motivated to be debt free, the snowball accelerated debt elimination technique might be better for you. This method will help you to payoff your smaller debts first to feel like you're making progress faster. This may help you to stay motivated to stick to your debt elimination plan.



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