Our Debt Repayment Strategy

As you know if you’ve been following along with our journey, we paid almost $60,000 debt off in 3 years. In this post we will go into more detail of the overall strategy we used to accomplish this! We used the avalanche method to organize our payments and quickly repay our debt.  The following steps are how we achieved this: 

  • We wrote down all of our debt obligations with their individual interest rate.

We had one auto loan and ten separate student loans.  If you have student loans, it may seem like you’re paying just one loan, but there are usually broken up into multiple separate loans.  Do some digging and find out the amount of each loan and what the individual interest rates are from your student loan company’s website. We easily found this information by at looking our account and loan details.

  • Next, we listed our debts in order from the highest interest rate to the least.

We had some student loans with the same interest rate. This may be the case for you as well.

  • Once items 1 & 2 were complete, we started attacking our debt!

We did this by making the minimum payment on all of our loans, and putting any extra money we had towards the loan with the highest interest rate.  Once that loan was paid off, we put the extra money, plus the payment we were paying on that loan towards our next highest interest rate loan.  This way, each time a loan was paid off, we put an exponential amount of money toward the next loan.  If we had more than one loan with the same interest rate, we would pay off the smallest loan with that rate first. 

Another debt repayment method that is similar to this is the snowball method.  In this method instead of paying off the loan with the highest interest rate first, you pay off your smallest loan first (regardless of interest rate). 

If you have multiple loans that you’re trying to pay off, you may want to do some research and find what method you think would work best for you.  In each method the idea is that once you pay off the first loan, you have more money to put towards the next. 

Whichever method you choose whether it’s one we mentioned above or something entirely different, the most important thing is that you keep paying extra on your loans every month.  By paying extra you will drastically shorten the time it will take to repay them, and you will save yourself so much money by not having to pay more and more compounded interest.  This way you can save more money for the things that you really care about!

-Haley Klaas

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12 comments

Great ideas for getting rid of debt. Thanks for posting your methods, it is so good to get a handle on it and these tips are helpful!

Hi Erica, you’re welcome! I’m glad you enjoyed it. Have a great day!

These are great tips! We were inspired by Dave Ramsey’s book to do the same. We’ve paid off most of our debt besides the house and it feels so good!

Awesome!!! You’re doing great, congrats! Have a great day!

I’m currently on my own debt repayment journey with my student loans. It’s a process, but I’m making progress every week! Congratulations on breaking free from those chains!

Hi Elaine! Yes, it is definitely a process, but I hope our posts are an encouragement that it is possible! Thank you and have a great day!

Hey Haley, great post. This resonates with me because I am trying to pay off student loan debt. I am tacking the loan with the highest interest rate and paying double the amount. Fabulous tips!

Hi Sheena, thanks for your feedback! That’s awesome, you’re doing great- congrats! Have a great day!

so many great tips here, thank you!!

Hi Tatianna, thanks for your comment! I’m glad you enjoyed it. Have a great day!

Thank you for sharing valuable tips. Writing things down make you more organized and that has helped me a lot in my life. I am glad that you worked it out.

Thanks for your comment Susan! Yes, being organized definitely makes it easier! Have a great day!