1. Payoff your smallest debt first and apply the money from the first loan to the 2nd loan and then the 1st and 2nd loan money to the 3rd loan and so on… This creates a snowball effect which will psychologically eliminate debt and make you feel better about getting rid of debt faster.

2. Payoff the debt with the highest interest rate first thereby saving yourself the most money. Economically this would make the most sense. Unfortunately people have a hard time sticking go a plan when it seems harder. This will save you the most money (interest) over the long run.

Either one of these plans will get you out of debt eventually. It just takes the willpower to stick with either plan.

What do you think about these plans? Please comment.

If you enjoyed this post, make sure you subscribe to my RSS feed!