Debt Snowball – Debt Avalanche – Consolidation Loan – Creditor Negotiation
If maintaining repayment obligations DIY options are very effective
Ideal for those who can stick to a plan and make more than the minimum repayment
DIY debt relief is tackling debt on your own whilst utilising one of many debt reduction strategies.
Most debt reduction tactics lend themselves to DIY solutions. The decision for doing it yourself or enlisting the help of a professional, is based on comfort level. Some are happy to tackle things on their own whilst other are not.
There are numerous benefits in tackling debt on your own, examples include:
DIY isn’t right for everyone. Below are some considerations:
Any type of debt can be included into your debt reduction strategy – examples include:
Different strategies work better for different debt types, compare pros and cons of each prior to implementing.
Below are commonly used solutions for various debt types and situations:
Budgeting will be at the core of any debt reduction strategy.
Total Debt$0
Total Repayments$0 per month
New Monthly Payment$0
You could save$0 per month
A great starting point is to first figure out what you can afford to pay back along with evidence of this. An example of this could be providing information on a serious change in financial circumstances such as job loss, relationship breakdown, illness, etc.
Then contact your creditor(s) and ask for the department that deals with financial hardship. They can provide you with options based on your circumstances.
This debt snowball plan is the process of using a rollover method for paying down debts in the order of smallest balance to largest. As soon as the first debt (smallest balance) is paid off, use the freed-up repayment amount to pay down the next debt and so on. Learn more on the debt snowball method here.
This debt avalanche plan is the process of using a rollover method for paying down debts in the order of highest interest rate first, down to the lowest. As soon as the first debt (highest interest rate) is paid off, use the freed-up repayment amount to pay down the next debt and so on.
There are pros and cons of each and this is determined by what a person is comfortable with along with their own specific circumstances.
If using a company, be sure that the costs associated with the service are transparent and there is a clear benefit to you. A fee based service shouldn’t put you into further debt.
Firstly, all debt relief solutions incorporate a budget, this alone can solve many problems. Two highly popular DIY options which require no new finance are – debt snowball and debt avalanche.
Other popular solutions that require new finance include debt consolidation loans and credit card balance transfers.