Debt Repayment Hacks to Stop Runaway Debt

Runaway debt is one of the worst nightmares for anyone, not just because of the negative impact it can have on your credit score, but also due to the strain it can add to your life.

If you have a relatively strong control over your finances and are able to maintain a decent credit, chances of you having to deal with runaway debt are minimum. Unfortunately, life is unpredictable and there will be times when you end up finding yourself with massive debts that you have trouble repaying.

This is when you should consider certain debt-repayment hacks to get your finances under control and get your life back on track. Given below are some key strategies in this regard.

1. Transfer Balance Wherever Possible

If you are burdened with huge debt on your credit card but are confident of being able to pay it off within a short period – say, six months or one year – using a balance transfer facility would be worth considering.

Balance transfer is an option that many banks provide wherein you will be able to shift the amount payable on one or more cards to another and pay off the debt interest-free within a specific period. However, remember that if you are not able to pay up within this period, the interest rates may skyrocket, landing you in deeper trouble.

2. Follow the Stack Method

If you have debts payable across multiple financial products, you could considering using the stack method. This entails you paying off debts with the highest interest rates first while dealing with those with lower interest rates by paying the minimum required amount.

The logic behind this method is that after you manage to settle up debts that have high interest rates, you will end up with more funds to pay off lower-interest debts as you will be bringing down the interest you are liable to pay.

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