Debt Relief Options: Accelerated Debt Payoff Plans

Instead of paying off your debt with a lump sum check, here’s another accelerated debt relief option which may be the next best thing.

It’s promoted by David Bach, Dave Ramsey or Steve Smith; pretty much any financial guru out there. It’s called an “accelerated debt pay off plan”, and goes by many names: “margin roll up plans”, “debt roll down plans”, the “debt snowball method” and the “DOLP method”. There are three main flavors of these accelerated debt relief plans, yet they all boil down to the same principles.

The basics are these accelerated debt relief plans are this: if you want to get out of debt as fast as possibly without any negative impact on your credit whatsoever, you just need to pay off your debt.

If credit is ultimately most important to you now, then you must cut your expenses to the bare minimum and put EVERY DOLLAR you can towards paying off your debt in an accelerated fashion in order to get out of debt ASAP.

Accelerated debt pay-off plans come in three main types. In each, you continue to pay the minimums on all accounts and all the additional money you can afford beyond this becomes the money you’re going to use to pay off your debt.  This is often called your “margin.” Your margin is then focused on ONE account at a time, the differences between the three types of accelerated debt relief plans is in which account you choose to pay off first…

The three different approaches to Accelerated Debt Pay-Off Plans are:

1) List your debts in order of the highest interest rate to lowest. Use your margin funds to pay down the highest interest account first (it’s costing you the most) until it’s paid off, then pay down the next highest interest rate account and so forth, until your debts are eliminated…

2) List your debts in order of the current balance, paying down the account with the lowest balance until it’s paid off,  (this can help your credit by showing open accounts with low to zero balances, improving your debt to credit limit ratio), then pay down the next lowest balance account, etc., until your debts are eliminated…

3) Take the current balance of each account and divide it by the minimum payment (= division number), then list your debts by this division number from the smallest to the biggest, paying down the account with the lowest division number until it’s paid off, then pay down the account with the next smallest division number, and keep going until you’re debt free…

Any of these three Accelerated Debt Pay-Off Plan approaches can usually get you out of debt in about five to seven years if you can afford to pay double or triple your minimum monthly payments, and IF you are committed to budgeting and putting as much money as possible into your margin. This can be less or more obviously depending on your total debt. It requires self discipline and long term commitment.

Each of these “accelerated debt relief”  approaches require paying significantly MORE than your minimum payments.  If you really get serious about it,  you could be debt free even faster by putting more money towards paying off debt.

You will have no negative affect on your credit with an “accelerated debt pay off plan.”

It’s a very simple idea but not a lot of consumers organize their accounts or payments in this fashion. People may put their extra money towards the largest balances, or take turns putting extra money throughout all of their accounts, continually paying interest on their entire debt profile. Instead of spreading your payments between accounts, the accelerated debt relief plan is a much better way to structure your payments and put your money to its best use to be debt free ASAP.

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Jesse Niesen
DebtGOTOGuy.com
Debt Relief Guide Online
888-928-DEBT(3328)

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