It does not matter how you got here. What matters is what you do to reduce and pay off your debt. This guide will share five easy steps you can take to pay off debt quickly.

Tips to Pay Off Debt

Having debt may be allowing you to live in a house, commute to work in a car, invest in a business, or manage medical bills. Maybe credit card debt has allowed you to truly afford a lifestyle you are not quite able to keep up with anymore.

Regardless of the kind of debt, paying it off can be grueling – especially when your credit score is falling too. You can make your monthly payments, but still feel like you are not creating a dent. The good news is: We are here to help you! Learn five easy steps and practical tips on how you can pay debt off faster.

1. Step to Pay off Debt: Consider All Your Options

Before taking any major financial action, do your research on what is out there. There is no one right way to pay off loan or credit card debt, as long as you make progress. Four of the most popular tools you can deploy to pay off your debt are:

Make Major Budget Adjustments

Instead of shuffling between a bunch of financial and lifestyle priorities, some people opt to get laser-focused on one or two debts they want to pay off fast.

Balance Transfer High-Interest Debt

Some people can save money on interest by transferring a high-interest credit card debt to a credit card with a lower interest rate.

Consolidate or Refinance Debt to a Lower Interest Rate

Instead of transferring a balance from one credit card to another, some people opt to consolidate several debts using a personal loan with a lower interest rate than their combined interest rates.

Change Your Debt Payoff Strategy

Instead of making a major financial move, some people opt to simply adopt or change their debt payoff strategy. Two of the most popular plans to pay off credit are the debt snowball and debt avalanche methods.

Snowballing your debt means that you pay off your lowest debt balance first, then your second-largest, until you finally tackle the highest amount. The debt snowball method helps you psychologically reward yourself for reducing your loan or credit card debt.

Avalanching your liabilities, on the other hand, means paying off your debts from the highest to the lowest interest rate. The debt avalanche method can help you save money over time and improve your credit score faster, but it may not give you those motivational early wins in your debt payoff plan.

2. Step to Pay off Debt: Minor Changes With Major Effect

While you are researching your options, there are seemingly tiny lifestyle changes you can make to help you pay more toward your debt. These are everyday DIY tactics that could potentially save you money that you can use to pay off debt faster:

Make the Room in Your Budget

If you are not paying as much toward your debt as you want to, make sure you are budgeting out more money to make that happen. If your budget is tight and you are making tough decisions about where to put your money, focus on minimizing any extra spending you can and contribute that toward your debt.

Cut Back Spending

Whether money is tight or you are just hoping to pay off debt faster, everyone could probably benefit from cutting back on some extra spending. Some people take it to the extreme by reducing all extra spending to only the bare bone essentials. You know yourself best, but if you can reduce your expenses and make minimum payments only to pay more toward your debt… do it!

Contact Your Creditors and ask for Lower Rates or Other Options

Calling your creditors for a rate reduction is a long shot, but sometimes you can secure a lower interest rate, which means a lower payment… which means you can pay more money toward your debt priorities. This step could also improve your credit score, so giving it a try is absolutely recommended.

Use Windfalls to Your Advantage

If you earn credit card cashback, tax refunds, or product rebates, use that extra cash toward your debt payoff goals. The amounts may seem tiny but remember that every cent you pay back to your credit card balance or personal loan debt will add up.

3. Step to Pay off Debt: Understand Your Debts

Take some time to know the details about your credit card or loan agreement. You know the basics, but many creditors have different policies for fees, payoffs, and payment types. Before you go any further on your debt payoff journey, know the answers to questions like:

  • Can I prepay without fees or penalties?
  • How are normal and additional payments applied?
  • Is my debt secured or unsecured – what are the risks to not paying off my debt?
  • What are the fees associated with balance transfers or payoffs?
  • If I take out a new loan or credit card, what will my new monthly payment be and how much will it cost to borrow the money?

It seems obvious but being on top of your creditors’ policies will help you make better-informed decisions, and potentially avoid fees.

4. Step to Pay off Debt: Make a Major Financial Move

Even though you are informing yourself or cutting out extra spending nothing seems to be helping. If you are frustrated by your finances or feel like you are not paying off debt fast enough, maybe it is time to consider making a life change.

We are not talking about cutting out a $5 cup of coffee here and there. We are talking about major financial moves that transform your finances to help you pay off debt faster, like:

  • Move to a home that costs significantly less.
  • Switch to a higher-paying job or pick up a side hustle.
  • Revert to your barebone ‘emergency’ budget by cutting out all spending except the absolute essentials (not for the faint of heart).
  • Reduce your expenses by consolidating your debt, refinancing your mortgage, or selling your car for a less expensive one.

We recommend doing a lot of research and math before taking any of the steps above since they have lasting impacts on your financial situation. If you are serious about making leaps in your debt payoff journey, they could help you pay off debt in a big way.

5. Step to Pay off Debt: Take a Debt Mental Health Day

Okay, so you rolled your eyes at the idea of a ‘Debt Mental Health Day.’ We get it; the concept is corny. But many of us with debt have a bad relationship with money. Taking a Debt Mental Health Day means scheduling time to examine your relationship with money in order to improve it.

Questions to help you find out how you think and feel about your finances could be:

  • Do you have strong emotions related to your financial situation?
  • Have you been able to come to terms with that one credit card balance or medical debt?

Whatever comes to mind our whichever feelings occur: Do not judge. It is okay to feel angry or ashamed about your debt. Dealing with those emotions can help you be in a better position to pay it off faster.

Recap: How to Pay off Debt

Not every single tactic listed above is going to help you. If you can find a few ways to slash your debt even just a little faster than what you are doing now, it is a win.

Also, remember to keep the plates spinning. No matter your debt pay-off strategy or what financial moves you set in motion, continue to make your minimum payments. Having too much debt can feel like your head is falling below the water, but you can keep treading as you swim to shore.

Here is to you for taking strides to improve your finances and paying off debt, even when it is hard or stressful and you do not have all the answers. There is an end to your debt in sight. You have got this.