What's the Priority: Clearing Debt or Settling Personal Loan?

Debt Repayment Strategies

Hey Kristin, I'm torn between paying off debt or a personal loan. What should I do? - Maureen

Hey Maureen, it's great that you're taking steps to tackle your debt! It can definitely feel overwhelming, but with some guidance, you can make progress. The timing of debt repayment is crucial, especially when interest rates are on the rise. As the Federal Reserve increases rates, borrowing money and carrying debt become more expensive. To decide which debt to prioritize, consider the interest rates. The debt avalanche method suggests paying off the debt with the highest interest rate first. This way, you'll save more in the long run by minimizing interest payments. However, the debt snowball method recommends starting with the smallest debts to build momentum and motivation. When choosing between debts, consider the type of debt, the interest rates, and your personal circumstances. Remember to be kind to yourself throughout this process. Good luck! - Kristin