Debt amortization is the process of creating an effective plan to pay off incurred debt.
This can apply to individuals, organizations and even government institutions.
Making expenses major purchases leads to debt.
Individuals mostly borrow money from family and friends or take loans from banks and financial institutions.
Whilst interest may not accrue in the former case, it does in the latter.
Howbeit, it is advisable to have a debt amortization plan as an individual or organization.
Whether the repayment plan is short- term or long- term in nature, below are three ways to ease a personal debt repayment.
1. Dedicate extra source of income to repayment
If you have a side hustle, it is a good idea to use the income you receive on it to repay your debt till it is cleared.
However, if you do not have a side hustle, it helps to start one to offset the effect of repayment on your main income.
2. Allocate part of income to debt amortization plan
Just like we have the 50- 30-20% rule, you can determine what percent of your income will go to repayment till you pay your debt.
This is a practical means of paying back debt that requires personal discipline and commitment.
3. Cut back on expenses as part of debt amortization plan
Cutting back on unnecessary expenses is an effective way to give room for saving more money and paying up faster.
However, if this seems like a challenge, take consolation in the fact that it is only a temporary habit that you have to take on to clear your debt.