The important thing is not being afraid to take a chance. Remember, the greatest failure is to not try. Once you find something you love to do, be the best at doing it.

Debbi Fields, Author

When is enough good enough?

Debt control is the process of managing your existing debts by incorporating a strategy. When people are burdened with debt they often consider maintaining a budget of their expenses and managing debt efficiently using debt management plans.

These plans allow people to eliminate debts by following a debt-repayment structure. These plans work best for unsecured debts like credit card debt, payday loans or bank overdrafts and personal loans. Debt management plans usually exclude secured debt like mortgages or car loans etc.

What are debt repayment plans?

  • Snowball Method

  • Avalanche Method

  • Consolidation

  • Debt Handling

I make a conscious effort to keep things in perspective when I get burned out. It is easy to get stuck in the daily grind, but if you think about all the distance you have covered, and what lies ahead, it is much easier to feel motivated and optimistic.

Alex Litoff, Event Farm

Snowball Method:

This is a debt reduction strategy using which you are supposed to pay off your smallest debt first and then the next big debt and so on. Once you eliminate your smaller debts, you can gain momentum towards paying your larger debts.

Once the small debt is paid, you can roll your money to pay off the next debt. Here is a debt reduction strategy using the snowball method:

  1. Make a list of all your debts and order them from smallest to largest
  2. Make minimum payments on all your debts except for the smallest one
  3. Pay as much as possible on your smallest debt.
  4. Once your smallest debt is paid, you can roll the money
  5. Repeat until all debts are paid in full

Avalanche Method:

This is another method using which you can be debt-free. The avalanche method is the cheapest and the most logical route to becoming debt-free. This method helps you pay less interest over the course of your debt repayment. With debt avalanche, you can pay as much as possible towards your highest-interest debt while contributing payments to the other debts as well. This process continues until you are debt-free. The main benefit of using this method is people end up saving more money which would otherwise be paid as interest on loans.


Debt consolidation is a popular method of accumulating your long-standing debts under a single loan at a lower interest rate. This strategy is mainly used to consolidate credit card debts. You may also consolidate other debts under this strategy. It makes debt repayment more manageable and convenient. With debt consolidation, you can club all your debt under a new loan, and pay an amount monthly towards a single loan. This way you can easily pay all your debt within 5-7 years. This strategy is useful for people whose debt is spread across multiple credit cards or payday loans.

Debt Handling:

Though this method is not recommended, you may use it only if you are burdened with enormous debt. This strategy is used to negotiate the interest rate or terms of your existing loan with your lender or bank. Sometimes, individuals also negotiate the loan amount.

Consider the two scenarios that emerge while using the debt handling method:

In the first case, suppose you apply for a reduction of the debt amount. Then you end up paying a partial balance instead of the total amount you own. Thus, your debt will be treated as debt settlement by the bank and thus you may end up hurting your credit score.

In the second case, suppose the lender has reduced your interest rate. Here you have to pay the remaining balance in full. If you make payments according to the settlement rules, you will be debt-free and you can avoid a negative impact on your credit score.

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