The debt snowball is a key tool in paying off your outstanding debt. There are two ways to make the snowball the most efficient, one by increasing the amount of income being use in it and two by lowering interest rates on existing debts. Increasing income can come from a part time job, or squeezing every penny out of your existing budget. We have certainly tightened our budget over our debt repayment. What we have found to be the biggest help was lowering our interest rates. Going from an APR of 17.9 to 1.5 allows that monthly payment to work more effectively, allowing more dollars to be applied toward principal then interest. This has been the biggest win for us over the last three years and helping us pay down over $75,000.
Do you need help digging out from under your debt?
We were able to accomplish the lowering of our interest rate by using a debt counseling service provided by our local credit union. They negotiated with our credits on our behalf to reduce our rates. You should check with your bank some offer this service free of charge. You can also contact your creditors yourself and try and negotiate a lower rate. You may not have luck on your first phone call, you need to be persistent. There are a number of stories of people who have been successful in lower APRs just by being diligent and make several calls. There are credit counseling agencies available that may charge you a small monthly, so depending on your success with the above methods and the amount of debt you have this may be an option worth pursuing.
What ways do you keep your snowball rolling smoothly?