How to Manage Multiple Sources of Debt?

Debt is a huge burden on your shoulders.

Moreover, if you have multiple sources of debt you may feel like as if you are virtually drowning in debt.

Nowadays, student loan in America averages around $26,000 per student. More and more people are taking out auto loan. Mortgage loans are also on an all time high and credit cards outstanding are also rising. Today, more and more people are carrying multiple sources of debt. This has become a reality.

So, what is the way out?

How would you going to manage multiple sources of debt?

Well, you do not need to blame yourself that you have multiple sources of debt.

This will not help you even to get rid of a single debt.

What you need is a well thought of strategy to deal with multiple sources of debt.

You have to come out with a solution to deal with multiple sources of debt.

How to Manage Multiple Sources of Debt
No matter what type of debt you have, whether you have an auto or car loan, mortgage payments, credit card bills, or even a student loan; you can surely get out of each of these debts if you plan, prioritize and follow a well thought of strategy of paying off your debts. Having said that, you have to make sure that whenever you take out additional debt it should happen when it is absolutely necessary.

Actually, managing multiple types of debts is a balancing act. On one hand, you have to take care of your regular expenses, and on the other hand, you have to pay off your debts. In the midst of all these, you also have to spare some room for savings. All this is really overwhelming, but very much possible.

So, let us look how to manage multiple sources of debt.

Prioritize Your Debt Payments

If you are finding it difficult to pay all of your debts at all times, the best option comes to you in the form of prioritizing. So, you should prioritize your debt payments. In this context, if you have a car loan, student loan, credit cards, mortgage loan, utilities to pay off, then your mortgage loan payment should come first, followed by utilities payment, then car loan, student loan and finally credit cards payments. Also, if you have multiple credit cards then you should pay for those credit cards first which have higher interest rates and amounts.

However, there is one more approach. You can pay extra towards the smallest loan so that it is quickly paid off. This is popularly known as Debt-Snowball Method. So if you have $4000 outstanding on a car loan and $25000 on student loan, then you should make extra payments towards car loan so that it is paid off as quickly as possible while meeting minimum obligations on other loans and outstanding.


Budgeting is another way by which you can manage multiple debts. So plan and prepare your monthly budget so as to fit all your debt payments. You might have to compromise on your other usual spending, but this would help you in the long run. As a general rule, not more than 50% of your take-home pay should go towards paying off your debts.

Thus, you have to structure your budget in such a way that your debt payments should not exceed 50% of your monthly income. When you prepare your budget, start by allocating funds towards debt payments. Once you have done that see how much is left with you. If the debt payments exceed over 50% of your monthly earnings, then revise your budget and allocate minimum payments towards loans that have low interest rates and outstanding.

Reducing your living expenses

Well, reducing your living expenses means that you have to cut down on costs. This in turn, will help you in managing your multiple debts. When you lower down your living expenses, you end up saving more money with you. This money you can use towards paying off your debts.

For example, if you are paying a monthly installment of $200 per month towards your car loan, by reducing your living expenses, you can raise this figure by another $50 so as to pay $250 towards your car loan per month. This would help you in paying off your debts quickly.

So, consider on cutting costs. You can begin by saving on travelling expenses. You can also reduce on fun expenses such as eating out and watching movies in theatre. By doing all this, you end up saving hundreds of dollars with you that you can put towards paying off your multiple debts quickly.

Calendar Management

Debt payment comes as a responsibility. Moreover, if you miss out repaying your debts on the due date, you can be charged with penalties. So to avoid such scenarios, you must follow and adhere to calendar management.

Calendar management helps you to pay all your debts on scheduled date. You don’t miss out on any debt repayment and so, do not have to pay any extra charges or penalties.

In order to facilitate calendar management, you can begin by maintaining a calendar in your computer, Smartphone, or even on a notepad. You can even take the help of personal financial management software and set up reminders so that you get notified as soon as your debt payment is due. Better still, you can set all debt payment made through online bill payment option. If you make the same amount of payment each month, set a fixed date for all your debt repayments so that you exactly know when you have to make the payment.

By doing calendar management, you stay organized, make debt payments timely and hence save your money too.

Consolidate, Negotiate and Transfer Debt

Consolidating debt and negotiation for lower interest rate is a good option when you have maintained a good credit with your financers or creditors. When you have a good track record of debt repayment, it becomes easy for you to negotiate for lower rates. By consolidating debt payments, you can quickly get rid of your debts.

Apart from negotiating and consolidating debt, you also have the option of transferring debt. Suppose, if you have multiple credit cards, then you can consider transferring your credit card debt onto a credit card with a lower interest rate. You can also transfer your debt onto a credit card which offers a zero interest. However, you should note that zero-interest credit card; have zero interest only for a limited period. So, you should take care to make all your payments before the zero-interest leverage expires.


So you see that there is no point in getting overwhelmed by your multiple debts. What you need is a well thought of strategy so that you can pay off all your debts. If you follow the points as mentioned above, you can very well manage multiple sources of debt. There is no need to be discouraged and feel depressed about your debts. You just need to stick to an action plan which can bring you out from all your debts. Although the above points that we have put forward before you are not exhaustive in any way, but will surely guide and help you to come out of your debts.

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