Become debt free with a method that will save you a ton of money and time.

We will take, for example, someone who has four credit cards and one home equity loan, and that he only pays the minimum payment every month.

If he or you have more than 20 000$ in debt on your credit card and 15 000$ on your loan what is the fastest and easiest way to get debt free? After reviewing the fact you find out that if you continue to make the minimum payment it will take more than 15 years to pay your debt, and you will end up paying more than 15 000$ in interest, for a total payoff of 50 000$! If one of your goals is to live debt free, it’s may not be the best idea to pay the same debt for 15 years. So you decide to sell one of your cars, or your boat, so you will have extra money to put on your dept. Let’s say 400$ per month.

If you decided to be debt free as fast as possible you have two choices of payment that you can decide.

1. The first option you have is to split the 400$ in 5 equal payment of 80$ each, which you could then apply toward the four credit cards and home equity loan. With that one simple decision, you would save more than 8000$, and you will reduce the time it would take you to get out of debt by eight years! If you look at that it can sounds like the best choice you will have, but the number two should be even more interesting.

2. What if instead of splitting the 400$ in five, you apply the 400$ to the debt with the highest interest rate until that was pay off, and then added the payment you’d been making on that debt to the 400$ and applied both in the second highest interested. You continue as long as all your debts are paid. With that method of payment, you will save 9 000$, and you will reduce the time it would take to get out of debt by 10 years!

As you can see by using the same amount every month you can dramatically improve the time it will take to get debt free and it will save you a lot of money. It’s not only what you do, but also how you do it that makes the difference.

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