When looking at credit bills, most people only pay attention to a number; specifically the total amount they currently owe in debt, and if that’s your priority, you are probably not getting far in getting rid of all your pending debt(s).
The snowball method, however, is one of the best techniques to help you pay off your first balance of short-term loan debt in the least six (6) months as compared to the other methods that usually take more than a year, even with the highest of APRs. If you are propelled by a quick win, then the snowball method is a better choice for you today.
The Snowball Method is a strategy that is common for debt repayment.
This particular method focuses on paying your smallest debt balance before moving on to the larger ones which eventually eliminates your debts.
The quick wins from settling the smaller debts add motivation and keep you going until you are completely debt-free.
The main advantage of this method is the psychological boost it gives. When you see your debts vanishing little by little, it can increase your zeal to continue paying off more debts.
This can also be a pretty helpful strategy for paying off a pending cash advance loan.
The Debt Snowball method is a “DIY” (do-it-yourself) debt reduction strategy through which one who owes debt on more than one account can pay them off starting from the smallest balances.
This strategy involves the following steps:
This step first starts by you listing out all your unresolved debts; this involves writing down the name of each online payday loan or credit card debt, its balance, and the minimum monthly payment owed by you
Now, supposedly these are debts, it should be written down like this:
Please note that the above-listed debts are mere examples that can be used when following the Snowball Method.
The next step involves you sorting out your debts accordingly and arranging them from the smallest to the most outstanding balance. Using the below example, you can re-arrange your list like:
Now, you must pay up your monthly minimums to avoid late fees and dips in your credit score which could in turn affect your credit rating in a negative way.
Anytime you pay off a debt, use any additional debt repayment funds you have to put towards paying off another smallest debt.
Going back to the above-listed example in step #2, you would be paying the required minimums of $600 and $200 towards debts two (#2) and three (#3), respectively.
After making those minimum payments, let’s say you come across an extra $150 to accelerate the other debt repayment, you will need to add the $150 to the $180 monthly minimum you are already paying towards debt one (#1) (your low-balance personal loan).
Redoing step #3 involves paying the most you can each month towards debt one (1) until your balance hits zero.
If you can be chipping in that extra $150, you’d have paid off your $1,000 balance within just four months. And now that your instant payday loan is of the past, it’s time to focus on your auto loan.
Again, continue paying the minimum towards debt three (3), but now, in addition to the $600 you were already paying towards debt two each month, including the $330 you had been putting into paying off debt one (1).
Now you’ve successfully snowballed your money and you can pay a banging $930 on your auto loan every single month.
Keep repeating the payment structure listed in step #4 until debt two (2) is gone. Then roll over your payments once more and take on the next debt on your list.
Now, keep this going, paying and rolling cash from one debt to the next up until you’ve cleared off every liability on your list.
If you are planning to be quick in settling your debts, then, the snowball method is a strategy that will be really helpful to quickly pay off the smallest debt and reduce the number of payments and accounts that you do have a hard time tracking
Also, if your emotions have a strong effect on your behavior, then, you’ll stand to gain from the snowball method as this helps give motivation and build confidence in your ability to get out of debt.
Again, as you make progress with the Debt Snowball strategy, you will more likely stick with the plan and you will readily use it to address more important debts when it’s time to tackle them, especially when you’re swept over by what you owe on larger balances.
Refinancing debts relate to the ability of a borrower to apply for a new loan or debt instrument (a tool used to raise capital) that has better terms than a previous contract to pay down a previous debt.
A possible example of debt refinancing would be applying for a new, cheaper online payday loan offer and using it to pay off the liabilities from an existing loan.
Payday loans are targeted towards customers who need quick cash with no credit check. When loan collectors can’t repay a certain loan, they may be forced to get a new short term loan offer to repay the original loan collected (this is sometimes referred to as “rolling over” the loan), which may, at times, come with an increase in the cost of borrowing.
The Debt Snowball method is just a simple approach for becoming debt-free.
That being said, if you are ready to let go of every single debt you owe this New Year quickly and easily, then the best thing for you to do is to sit down, make a plan and identify the right debt repayment strategy to use.
The best debt reduction method for you would be the one you will stick with till you have gotten all your debts under control; why? Well, because it provides early and visible results and thus creates a belief that repaying your debts is possible. The Snowball Method is one that has worked really well for so many people over time, and one that is definitely worth trying.
Disclaimer
Short term loans are emergency credit loans that have been designed for short term financial issues. The loan amount is small and limited to a fixed upper limit. The loans are exclusively created for the short term and will become expensive burdens when extended and used for long-term purposes.
The operators of Instant Payday NV are not lenders. We are neither a bank nor a financial institution. We are not involved in the process of making credit-based decisions related to lending, offering loans, or collecting repayment.
The website has been created to act as a bridge, a connecting agent between the applicants and the moneylenders. We do not charge any fee to process the loan application or help our customers find a reliable match for a loan from a third-party lender. We do not oblige any user/ customer to contact the lender or to accept a loan application.
The data present on the website related to short-term loans and the industry practices are for information purposes only. Instant Payday NV does not collect, store, or access the details related to fees and charges levied by the lenders. We do not endorse any of the lenders in the network.
Short-term loans are not available in all states. Not every lender in the network can offer a loan of up to $1000. We cannot guarantee that the loan application will be approved by a lender. Instant Payday NV also cannot guarantee that every application will be successfully matched with a lender or that the lender will provide the applicant the loan amount.
The lenders might perform a credit check through one or more credit bureaus (which include but are not limited to the major credit bureaus) to determine the reliability of the applicant. The lender will also need to perform other verifications such as confirming the social security number, national ID, driving license number, or any other identification documents submitted by the applicant.
The terms of the loan proposal depend on the lender and various factors such as the federal laws and state laws, or industry regulations. The terms and conditions of the loan proposal will vary from lender to lender and from one application to another.
APR Representation
APR (Annual Percentage Rate) is the interest rate calculated per annum for the loan. Instant Payday NV is not a lender. We do not have the required information pertaining to the rules, regulations, and terms used to calculate APR by individual lenders. APR calculations vary from one lender to another, one state to another. They also depend on various factors that decide the APR of a loan. The credit rating of the applicant can be one of the reasons.
Any other additional charges including but not limited to the origination fee, late payment fee, non-payment penalties, or non-financial that include debit collecting actions, late payment reporting, etc. come under the responsibility of the lender.
Instant Payday NV has nothing to do with the payments charged by the lenders or the action taken by them. We do not maintain any information regarding the same. The charges and actions are to be fully
disclosed by the lender as a part of the loan agreement. The calculation of APR is the annual rate and not the financial charge of the product.
Implications of Late Payment
We highly recommend our customers to contact the lenders to enquire about the possibilities of late payment. In the case where late payment is considered possible, the late payment fee is applicable and implied. The laws of the state and the federal govern the cases of late payment fees and vary vastly. All details related to the procedures and costs associated with late payment are disclosed in the loan agreement. Customers should carefully review the terms before signing the contract.
Implications of Non Payment
In case of nonpayment of the loan, both financial and nonfinancial penalties may be implied. The charges for nonpayment and late payment are disclosed in the loan agreement. Additional actions related to nonpayment’s such as renewals or extensions can be implied upon given consent. The terms of renewal are disclosed in the individual loan application. Additional renewal charges may also apply.
Lenders may perform debt collection practices. The practices are adjusted as per the Fair Debt Collection Practices Act and any other federal or state laws related to the industry to ensure that the customer or the loan applicant does not end up being a victim of unfair trade practices. Most of the lenders do not use outside debt-collecting agencies to recover the loans. They use in-house methods to collect the debt from the applicants.
Late payment and nonpayment of the loan might have a negative effect on the credit rating and further decrease the rating. This may cause them trouble over time. Lenders may report to credit bureaus such as Experian, Equifax, Transunion, etc. In such instances, the late payments and nonpayment’s may be recorded and remain in the records for a certain period.
