How to Make Payment on a Debt

Taking on debt allows you to make purchases, attend college and buy homes and cars. However, as the interest on each of these loans piles up, it becomes incumbent on you to pay these debts off as quick as you can. Making payment on debts requires a little planning, focus, and some basic math skills in order to be successful. Each payment made on a debt brings it closer to being eliminated and reduces the amount of interest paid each month.

Instructions

1

Collect statements on your outstanding debts, and note in a spreadsheet each debt's total balance, interest rate and minimum payment due each month.

2

Create a monthly budget that lists all of your income and non-debt expenses, such as cable, food and rent. Determine how much income is left over and subtract the minimum payments from the debt calculation spreadsheet. The remaining income is the amount that can be applied over the minimum payment on a debt.

3

Take the debt with either the highest interest rate or the lowest balance, and pay as much as you can on that debt, while paying the minimums on your other debts. Pay this debt by either mailing in a check to the creditor or making a payment online.

4

Continue paying on the one debt until it is paid off, and then apply the amount you had been paying on that debt to the next highest interest rate debt or the next lowest balance debt. Continue "snowballing" these debts until they are all paid off.