Accelerated Debt Relief – All 3 Plans Explained

Instead of paying off your debt by checking at once, this is another option which is the next best thing. If you want to get out of debt as quickly as possible without negatively impacting your credit, you must pay and pay off your debt by using an accelerated debt relief strategy.

There are three variations of debt relief acceleration, each with their names: “roll-up margin plan,” “roll up plan,” “debt snowball,” “DOLP method,” and many other names that you might have heard used for strategies that same. These accelerated debt relief strategies were promoted by David Bach, Dave Ramsey and almost all financial teachers out there, usually calling their unique names as if they were “secret methods.” All of them are “accelerated debt repayment plans.” The three methods of accelerating the elimination of accelerated debt are the same principle.

Basics of Accelerated Debt Relief

A plan to repay an accelerated debt will get you out of debt as soon as possible without having an additional negative impact on your credit at all. If your credit score or preserving a perfect payment history is more important to you than freeing the cash flow or savings offered by other options, accelerating debt relief is the only way to go. You will have zero negative effects on your credit with an “accelerated repayment plan.” Your credit will only increase by maintaining a good payment history, reducing the debt ratio to your income, and reducing your debt to credit ratio.

Expedited debt repayment plans come in three main types. In each method, you continue to pay the minimum on all accounts. All the extra money that you might be able to surpass is the money you will use to speed up paying off your debt. This is usually called your “margin.” Your margin is then adjusted on ONE account at a time until it is paid off. Then your margin is set on the following report on file. Three different methods determine the order of your payment for each of your accounts.

Here are the three types of debt relief acceleration, which are clearly explained:

First Low Balance:

List your debt in the order of the highest to lowest interest rates. Use your margin funds to pay for the account with the highest interest first (that’s the most expensive) to pay off, then spend the next highest interest rate account and so on, until your debt is deleted …

Benefit from the snowball effect, but you can pay more interest in the end than the First Highest Interest. The main benefit of this approach is the psychological effect of seeing the amount of debt disappear faster.

First Highest Interest:

Make a list of your debts according to the current balance, pay accounts with the lowest balance to full, (this can help your credit by showing open accounts with low to zero balances, increasing your debt to credit limit ratio), then paying through the next lowest balance account , etc., until your debt is deleted …

This strategy produces the lowest total interest, but depending on the balance of your high-interest loan, you may need longer to see your first loan/debt completely paid off. If the difference in total interest is not significant, then you might get more satisfaction from the First Lowest Balance method.

First Lowest Division:

Take the latest balance from each account and for those with minimum payments. This is your “share” number. Then register your debt with this “division number” from the smallest to the biggest, paying the account with the lowest division number first to pay off. Then pay the account with the next smallest number, and so on … Continue until you are free of debt …

This strategy produces the fastest payments, but depending on the balance of your lower division debt, you may need longer to see your first debt completely paid off. If the difference in total time is not significant, then you might get more satisfaction than the First Lowest Balance method.

Secrets of Success with the Expedited Debt Payment Plan

Each of these “accelerated payment approaches” requires payments that are far more than your minimum payment. One of the three Accelerated Debt Payment Plan approaches can usually get you out of debt in about three to seven years if you can afford to pay a total of two or three times your minimum monthly payment to pay off your debt. This can take less or more time depending on your total debt and how much you can pay. If you are really serious, you can