How to Pay Off Debt Fast: 7 Tips

Find ways to free up cash in your budget and bump up your income, then explore strategies for paying down balances.

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Written by Sean Pyles
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Edited by Kathy Hinson
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Want to pay off your debt fast? Here are seven tips that can help:

Figure out your budget

Getting a handle on your income and expenses can you help you figure out if you have any extra money to pay down your debt. Paying more than the minimum each month can speed up your payoff timeline.

While you’re focusing on debt payoff, work to build an emergency fund. Even a small one can prevent you from getting deeper into debt if an unexpected expense comes up. (Read more about how to save while paying off debt.)

Use this calculator to figure out your budget.

Reduce your spending

Every dollar counts, really. Cutting down expenses, such as streaming services, ordering delivery for dinner or ditching an expensive phone, can add up fast.

Consider what you would give up in order to be debt-free.

Stop using your credit cards

Halting your debt from growing any larger can make it easier to manage. One way is to stop using your credit cards.

Not adding onto the balance while you’re paying down debt can also help improve your credit utilization — or the ratio of your debt balance to your available credit — which is a major factor in calculating your credit score. The lower your credit utilization, the better it reflects on your credit score.

Look for extra income and cash

Scraping together extra income can increase how much you can put toward your debt, accelerating your payoff.

Look into legitimate side hustles. Some jobs can be completed in less than an hour, like user testing for websites and apps. Others, like freelancing, will take longer, but may earn you more cash.

Finding extra cash can help fuel paydown, too. And you consider using some or all of a windfall, such as a tax refund or work bonus, to make a lump-sum payment on debt.

Find a payoff method you'll stick with

Paying off debt is a financial and psychological commitment. Just as you have to have the cash to pay down what you owe, you also have to find a payoff method that works for you.

If some quick small wins early in the process will help you stay motivated, the debt snowball method may be right for you. With this tactic, you put all the extra money you can toward paying your smallest debt first (while covering at least the minimums on your other debts). When it's paid off, you roll the money that had been going to the first debt into paying the next-biggest, and so on, until all your debts are paid off.

But if you're more into delayed gratification and maybe saving a little money, the debt avalanche method may be for you. With this strategy, you focus on paying off the debt with the highest interest rate first. Always focusing on wiping out the debt with the highest interest costs can save you money overall and may also speed your debt-free date.

Look into debt consolidation

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Rolling multiple debts into one payment — ideally with a lower interest rate — through debt consolidation can make your debt easier to manage and less expensive overall. The less you have to pay in interest, the more money you can put toward reducing the underlying debt.

A 0% interest balance transfer credit card or a debt consolidation loan are two solid options for debt consolidation. Note that you’ll likely need a good credit score to qualify. Also, each lender sets its own requirements, and credit score may be just one piece of the puzzle.

Know when to call it quits

Sometimes debt can be too much. If you're having a hard time keeping up with your debt payments and your total debt is greater than 50% of your gross annual income, it might be time to get outside help.

Debt relief options, like debt management plans from a nonprofit credit counseling agency and bankruptcy, may give you the relief you need to move past your debts. Otherwise, paying off what you owe could take years and get in the way of other financial goals, like saving for retirement or a down payment on a house.

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