One most influential tool in aiding your efforts to accelerate the payment of your debt is making extra payments.
This is called making a power payment.
It means exactly what it says.
When you make an extra payment on any debt, the amount of the payment that you make is subtracted from the existing principal, (that is interest free) and powerfully lowers the principal on which the interest is figured.
This important, powerful principle works for you by lowering the principal of the debt.
The lowering of the principal reduces the interest that will eventually be computed on that principal.
Everything good happens when you make extra payments.
Even if you only make one extra payment per year, it will have a positive affect on your debt management plan.
The principle works whether you are paying an extra payment on a mortgage or on credit card debt.
The principle remains the same.
If you lower the principal on which interest is computed, the interest computed on that debt has to go down.
That is the power of a power payment.
Once the principle has been eliminated and the interest stopped, an individual can convert those payments to earning interest rather than paying interest.
This is the #1 principle of achieving wealth -- collect interest, don't pay it! That is how those with wealth accumulate even greater wealth.
It all begins with getting rid of your existing debt.
Along with power payments the concept of rolling-up your payments can be implemented to help pay off your debt quicker.
With roll-up, your debts will pay off much faster than if paid by making normal monthly payments.
To realize the full benefit of the debt management program, monthly payments should remain the same (or increase) until the last creditor is paid in full.
As each of the smaller creditors is paid off, the creditor with the next smallest balance receives the additional payment, thus decreasing both the amount of interest paid to creditors as well as the time it takes to become debt-free.
In the next article, "Eliminating Current Debt - Continuous Communication", you will learn that one of the underrated benefits of becoming part of a consumer credit counseling service is the assurance that you gain knowing that you are being constantly represented to your creditors.