Your Easy Guide to Tackling Debt Effectively

Your Easy Guide to Tackling Debt Effectively

Jan 25, 2024

Managing multiple debts can get overwhelming from time to time. The longer your debts remain open, the more you end up paying in interest, exacerbating an already spiraling debt problem. 

Finding a debt repayment strategy that suits your unique financial situation is crucial. It helps you channel your payments effectively, ensuring they have the maximum impact on reducing your debt.

When deciding which debts to tackle first, consider these two primary methods i.e. Highest-Interest-First Plan & Snowball Plan method. Here’s a walkthrough of the two methods. 

Highest-Interest-First Plan

The Highest-Interest-First plan emphasizes paying off debts with the highest interest rates first, as they accumulate more cost over time. For instance, an auto loan of ₹10,000 with a 4% interest rate paid over five years totals ₹11,049.91. The same loan with a 6% interest rate costs ₹11,599.68, an increase of over ₹500.

To implement this plan, list your debts from highest to lowest interest rate. Continue making minimum payments on all debts, but allocate any extra funds to the debt with the highest interest rate. Once that’s paid off, move to the next highest, and so on, until all debts are cleared.

Debt Snowball Plan Method

The Debt Snowball plan is another effective debt repayment strategy. In this approach, you continue making minimum payments on all debts, but direct any extra funds towards the smallest balance first. Once that’s cleared, apply the same amount to the next smallest balance, along with its minimum payment. Repeat this process, each time moving to the next smallest debt. This strategy builds momentum, much like a snowball rolling downhill, helping you progressively eliminate your debts.

Other Factors to Consider 

While prioritizing debt payments is crucial, it’s equally important to consider them alongside your other expenses. Before embarking on your journey to become debt-free, ensure that your basic living expenses are met and that your debt repayment plan doesn’t compromise your monthly budget.


Effectively managing debt involves a balance of strategic repayment, budget control, and financial self-care. Whether you choose the Highest-Interest-First or Debt Snowball method, remember to tailor your approach to your personal financial situation. With patience, discipline, and a well-planned strategy, you can successfully navigate your way out of debt and towards financial freedom.