Debts are not good if forgotten as you will have a ghost burden increasing behind your back without any notice. Many people don’t know the exact amount of time that their debt ends. Keeping a debt tracker to track your debt and lead you out of it is the right choice to make here.
Unpaid debts can affect your credit score and become a hindrance in the path of acquiring loans or opening accounts. However, keeping systematic records is the best way to avoid such situations and we are here to help you with a plan that is suitable for you.
Definition of debt tracker
A debt tracker keeps a record of your debt. It can be in the form of a notebook, application, or spreadsheet. Paying off your debt becomes easier if you know how much you owe. Your debt tracker should include information like:
Account names
These are the names of people or creditors to whom you need to pay back. For example, credit card bills are paid to Capital One. This ensures that you know who lent you the money and how many people you owe.
Account type
Different debts have different accounts, like medical debt, student loans, or credit loans. Hence you need a record for all types of handles. For example, consolidation for credit cards and forgiveness for student loans.
Balances
If you pay monthly, it is good to track how much debt is left.
Due dates
This helps to prevent any extra charges which can lower your credit score.
Interest rate
Interest is the additional money that you pay on a loan, knowing about the rates will give you options to pay off debt and maybe use the debt avalanche method where the highest interest rate debt is the priority.
Minimum payments
Minimum payments are the lowest amount that you are required to fulfill every month. If you make payments more than the minimum requirement, your debt will be paid off earlier.
Use the information to your advantage
Keeping a track of your debt will carve an easier path to getting done with the debt in an orderly manner. You can also try the debt snowball method, where the smallest debt is paid off first and then you move up on the grid. It also helps in fulfilling due dates that avoid delays.
Paying debt is a long process, you will likely feel unnerved at some point in time and your debt tracker will help you manage that unsure feeling.
Why you should track your debt?
If you have multiple debts, you will drown in them before you know it. A tracker gives you confidence and also brings you on track while catalyzing the process of being debt-free.
A tracker will also be the proof of your payments and give you a sense of satisfaction when you mark debts off the list. It also helps in finding the right strategy according to your goals.
