You may be worried about your multiple debt accounts but you’ll survive them if you’ll make a conscious effort to wipe them out. Though you may have gotten into this situation because of financial mismanagement, there are several ways to bring order to your finances. A decisively thought-out debts repayment program like a snowball approach may be of great help towards achieving this end. This approach is based on the simple logic that to reduce your debt burdens, you must reduce the interest payments attached to them. It’s a cost effective approach.

Every month when you settle your obligations, you pay the minimum amounts due to the loans with the lower interests but the high interest debts get a different and special treatment. You should try to find out every means to mobilize the maximum amount of money possible to pay for the latter. Once the loan with the highest rates is crossed off your list, the next loan of higher interest should then be tackled. Simultaneously, you should see to it that you don’t beef up your debts any further.

But the problem is you cannot always stick to this schedule of repayments because your debts may contain certain loans lent by family and friends. These carry a very low rate of interest or may be, even zero interest because they lent a hand out of affection for you. It’s this attachment that inspired their decision to help you and unlike formal creditors, your family or friends won’t go reporting to the credit agencies if there’s a default or delay from your side in repayments. Thus it’s important that you respect their regard for you and accord top priority to repaying them, even ahead of the higher interest debts you have.

But if you ignore these factors and still delay repayments of these loans, then it’s possible that you’re exploiting them, their emotions and their regard for the relationship they have with you. Such indifference can hurt relationships, causing edgy family gatherings and friend avoidance.

Since you may not know the monthly amounts payable for these types of personal debts, you can take the guidance from external personal loans for which you are paying or have paid off. You may also not know when these relatives and friends may need the money back so you should always be on the lookout for signals that will alert you to it. You must be prepared to act immediately and settle your debts.