by admin
12. January 2012 04:10
Hi Everyone, J.G. Wentworth here.
Debt has become a growing concern affecting countless Americans. And while some are able to manage their financial issues on their own, others find themselves knee-deep in debt and looking for a solution. Fortunately, J.G. Wentworth can help.
By selling your structured settlement payments for a lump sum of cash, you can start climbing your way out of debt and move towards a fresh financial start. While you must make the decision as to how to pay off your debt with your lump sum, below is helpful information regarding the two most commonly used types of debt payoff methods and the benefits of each. Before you have received any money from selling your structured settlement payments, you should list all of your debts. Then, by taking a look at your debts and what you owe, this will help you decide which debt payoff method below fits you best.
1. Pay off the highest interest rate first
Paying off your debt with the highest interest rate first can grant you several benefits. To begin with, this method may allow you to save money in the long term. Think about it – holding onto a loan with a 7% interest rate and paying off a 14% loan could save you money, depending, of course, on the amount of the 2 debts owed. Additionally, paying off your debt with the highest interest rate first, is emotionally refreshing. You're paying off the highest rate you owe, leaving you with lower rate payments that should motivate you to pay off even more of your debt.
2. Pay off the highest balance first
Others, however, have turned to the "snowball method" in which they pay off their debts from the smallest to largest amount, while making minimum payments on other balances. Several prefer this method because after paying off one amount in full and seeing results, they become motivated to continuously make other payments.
Both payment methods have proven themselves effective in helping those people struggling with debt. By reviewing your own financial situation, you can determine which method fits you best. If you have any questions or would like to learn more about how a lump sum can help you pay off your debt, feel free to contact us.