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How to Prioritize Your Debt Payments September 21, 2020

Downtown Honolulu, Honolulu
How to Prioritize Your Debt Payments, Honolulu, Hawaii

From dealing with student loans to credit cards, many adults dream of finding debt relief. Yet multiple accounts can make the process even more challenging. If you fall into that category, follow these tips to efficiently reduce or eliminate your total debt. 

3 Tips for Paying Down Multiple Debts

1. Identify Fees & Interest Rates

The original amount borrowed or spent often ends up being only a portion of the final debt. Interest rates and fees can quickly raise the total owed, making the pay-down process more complicated.

Start by creating a list of all your accounts that includes the current total plus the interest rate and any monthly or yearly fees associated with it. This will help you figure out which debts are costing you more in the long-run. 

2. Choose a Strategy

debt reliefWhile every situation is different, there are two main approaches to tackling multiple accounts: avalanche and snowball. With the debt avalanche method, all account minimums are paid monthly, with any extra sent to the one with the highest interest rate. This option usually saves the most money by reducing the total amount of interest paid. 

Alternatively, the debt snowball method emphasizes the smallest loan amount. While total out-of-pocket costs end up being higher than the avalanche method, the approach reduces the number of accounts. As a result, it's easier to stay focused and continue working toward the final goal. 

3. Consider Your Options

There are additional options to simplify the debt relief process. Negotiating with the creditor can help save money by achieving a lower interest rate or coming to a settlement with a lower pay-off amount. Consolidating multiple accounts into one can also reduce costs. In cases of extreme debt, bankruptcy may be the best solution.

A debt attorney will assist with each of these processes and help you determine which suits your needs best. 


If you're struggling with mounting debt, reach out to Greg Dunn, Bankruptcy and Debt Relief Attorney to review your options. Based in Honolulu, HI, the local debt lawyer has assisted residents across Oahu for over 20 years. Visit the law firm's website to learn more about their services, or find out more about your debt relief options by calling (808) 524-4529.

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