Escape Debt's Grip: How to Pay Off Debt Lightning Fast

by Romain Ruchot September 14, 2022

man freed of Police handcuffs representing having no debt balances

10 min read. Updated October 1, 2023.

Are you struggling to pay off your debts? If so, you're not alone. According to a report from the Federal Reserve, as of 2021, American households collectively owe more than $15.8 trillion in debt.

While there are plenty of methods to help you pay it down, the truth is that it's hard to get started. It doesn't matter whether you have 50k in student loans or 30k on credit card balances - the number one thing holding us back is that we don't know where to begin.

Debt is not something that should make you think about giving up on your dreams. It is something that can be overcome with a little bit of effort and determination.

While there are many ways to tackle expensive debts, here are 10 easy tips that can help you get started to consolidate debt fast.

1. Create a budget and stick to it
2. Make extra payments on your highest interest rate
3. Negotiate with your creditors
4. Use a balance transfer credit card
5. Cut back on unnecessary expenses
6. Get a side hustle
7. Sell some of your belongings online or at a garage sale
8. Put your money into a high-yield saving account or CD
9. Make lump sum payments whenever you can afford it
10. Seek professional help for debt payoff
Final words on paying off debt
EXTRA: 11. The Credit Pros
EXTRA: 12. SuperMoney

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1. Create a budget and stick to it

a spreadsheet and a pile of cash illustrating revolving debt

The first step to paying off debt is creating a budget. You'll need to figure out how much money you have coming in and going out every month.

This will help you create a plan for how much you can pay toward your debt balances each month. Once you have a budget in place, it's important to stick to it.

This means making choices about where you spend your money and being mindful of unnecessary purchases. It can be difficult to stick to a budget, but it is worth it if it helps your debt repayment.

If you're struggling with budgeting, there are lots of resources and support available to help you. You don't have to go through this process alone.

2. Make extra payments on your highest interest rate

If you're carrying debts, making extra efforts on your high-interest rate ones should be a top priority to pay down debt.

By doing so, you'll save money on interest, build momentum, and pay off your debts more quickly. For example, let's say you have two debts: a $5,000 balance on a credit card with a 15% APR, and a $10,000 student loan with a 5% APR.

If you make the minimum repayment on each debt every month, it will take you almost 6 years to pay off the credit card debt and just over 10 years to pay off the student loan.
But if you make an extra $100 monthly payment towards the credit card, you'll pay it off in just over 3 years.
And if you make an extra $50 payment towards the student loan each month, you'll pay it off in just under 9 years.

Graph showing Credit card debts are rising in the US

Image Credit: Chartr

So, by making extra payments on your higher interest debt, you can save time and money in the long run. This debt repayment strategy is known as the debt avalanche method.

In contrast, the debt snowball method strategy focuses on monthly payments toward the smallest debt first. Once the debt with the smallest balance is cleared, that money goes towards the next smallest debt, and so on.

If you struggle to find a way to increase the minimum payment, need guidance with debt consolidation, or want to reduce the loans you owe, talk with a Certified Financial Planner (CFP) or get in touch with The Credit Pros. to work on a debt repayment plan.

3. Negotiate with your creditors

a creditor offering wiggle room on debt payments

Reach out to your creditors and try to negotiate a personal payment plan. Many creditors are willing to work with you to help you get back on track.

It is not in their interest to watch their clients struggling to pay off debt or unable to afford the minimum balance when paying credit card debts for example.

Often, you can negotiate with lenders a lower interest rate or a longer repayment plan.

If you're not sure how to approach the negotiation, consider seeking out the services of a financial advisor. They can help you formulate a debt payoff plan and negotiate on your behalf. No matter how much you owe, your principal aim here is to tackle your debt first.

Remember, the goal is to avoid defaulting on your debt, which can have serious consequences for your credit scores, your finances, and your life in general.

Start making progress on your long-term financial goals; check our favorite companies in the personal finance space and our top recommendations to help you budget, save, invest, and more.

4. Use a balance transfer credit card

By transferring your balance to a new card with a lower interest rate, you can save money on interest and accelerate the process of paying off debts.

When choosing a balance transfer credit card, be sure to compare offers from multiple issuers to find the card that best meets your needs.

Once you've found the right card, simply complete the balance transfer and start working towards becoming debt-free. Be aware though, that for several people who found themselves with monetary difficulties at some point in their life, it often started with credit card debt. The highest interest rate is your enemy, even if it comes with free Airmiles, insurance, or other perks...

5. Cut back on unnecessary expenses

a woman keeping track of her credit card bills

You need to cut back on unnecessary spending and focus on building up your savings. Be mindful of your expenses, and only purchase what you need. When shopping, clever marketing strategies may tempt you with something free, but you usually end up paying toward it, one way or another!

Similarly, review your monthly bills and insurance policies, to make sure they are in line with the minimum amount you can put toward paying each month.

Track your progress over time, and make adjustments as necessary. Again, don't be afraid to ask for help from a financial advisor if you're having difficulty getting out of debt.

They can help you create a personalized plan that fits your unique situation. With dedication, perseverance, and a solid debt repayment arrangement, you could get out of debt and start fresh.

6. Get a side hustle

You're not alone if you're struggling to pay off debt.

The average American household has more than $96,000 in debt, including mortgage debt. Housing is the principal spending for most.

Luckily, there are things you can do to ease the burden. One option is to start a side hustle.

A side hustle is a way to make extra money outside of your full-time job. You can use this extra cash to accelerate paying off debt and eventually accumulate savings too.

There are many different types of ventures you can start but choose one that fits your principal interests and skill set. Even if you can only allocate it minimum time, it could pay off.

For example, if you're a great writer, you could start a blog or become a freelance writer.
If you're good with numbers, you could become a virtual assistant or accountant.
If you like working with your hands, you could start a home improvement business or offer pet-sitting services.

Getting paid for practicing a hobby will feel great! Once in a while, don't feel guilty spending this extra income on your loved ones!

Say you need a logo, for instance, just go to Fiverr to check the designers, see their work, and then validate the order if you are happy with the outcome. Prices start from $5.00 (hence the name Fiverr!). No contract, you pay once for the job you need. Check Fiverr out

On the other hand, if you are skilled with social media for example, why not join the platform as a seller, and manage a Facebook page for a business that doesn't know how or hasn't got the time to manage it.

Some sellers charge up to $300.00 a month for managing ONE page (and posting once a day). Could you do that? Then join Fiverr!

Lastly, if you want to learn a new skill, to then sell your services, Learn from Fiverr is a good place to start to get the knowledge needed to make more money.

7. Sell some of your belongings online or at a garage sale

a woman looking for a quick win by selling unwanted items

Getting rid of debt can feel like a never-ending battle. You work hard to make ends meet, but it seems like as soon as you get ahead, something comes up, like a huge bill to be paid, and you're back to square one.

If you're looking for all the extra money you can get, consider selling some of your belongings online or at a garage sale.

This is another good way to get extra funds towards your total debt. Not only will this help you to get rid of debt quickly, but it will also declutter your home and give you a sense of freedom.

8. Put your money into a high-yield savings account or CD

One of the best things you can do is to invest your money in a high-yield savings account or CD. This will help you to earn interest, which can then be used to pay off your debt.

In addition, by investing your money in a high-yield account, you'll be able to grow your savings over time, which can then be used to create an emergency fund or to invest in other financial goals. Get ahead of unexpected expenses as we explain how to build an emergency fund.

9. Make lump sum payments whenever you can afford it

a woman sitting on enough money to start paying off multiple debts

While making your regular monthly repayment(s) is important, lump sum reimbursements can help you get out of debt faster.

Lump sum payments go straight to the principal balance of your debt, which means that you will accrue less interest over time.

In addition, lump sum payments can help improve your credit score by decreasing your credit utilization ratio. When it comes to getting out of debt, every little bit helps.

When did you last check your credit report? Stay on top of it and get your FREE credit score.

10. Seek professional help for debt payoff

chart shwoing 4 mistake to avoid while repaying debt

It's not uncommon to find yourself in a situation where you have more debt than you can handle.

Maybe your spending got a little out of hand and you charged too much on your credit cards, or you took out a loan to buy a car or a house and then found yourself unable to make the payments.

If you find yourself in this situation, it's important to seek professional help.

A qualified credit counselor can help you develop a plan to pay off your debt and get your finances back on track.

They can also negotiate with your creditors to lower your interest rates or extend your payments. And if you have a lot of debt, they can even help you file for bankruptcy - the absolute worst-case scenario.

Final words on paying off debt

So, there you have it – 10 easy ways to quickly pay off debt. All of these tips are tried and tested, so why not give them a go?

No one likes borrowing money to pay for things, but sometimes it's the only option, whether that means going into a store credit card or taking out a loan.

Hold yourself accountable and pay back borrowed money as soon as possible. Not only will you be able to get back on your feet quickly, but you'll also gain valuable experience in managing your finances along the way.

After all, debt doesn't disappear just because you ignore it - control your ability to borrow money before it takes control of you!

EXTRA: 11. The Credit Pros

The Credit Pros, ranked by Inc. Magazine as one of America’s 5,000 fastest-growing companies 6 years running, is a financial technology firm dedicated to educating their clients on how to avoid credit-oriented mistakes in the future.

The Credit Pros will help you identify personal damaging inaccuracies on your credit and get them removed! They provide practical, honest credit advice when you need it and give you credit education tools so you understand your credit scores. Schedule Your Consultation or Get Started Online now!

EXTRA: 12. SuperMoney

SuperMoney helps people compare financial services. To date, they’ve helped millions of people shop for loans, investments, and other products. SuperMoney partners with the world’s leading banks, insurance, and principal financial service companies to empower consumers with a KAYAK-like comparison shopping experience - great tools when you need to keep cash in line.

Pecuniary decisions can be stressful; SuperMoney makes them easy and puts you in charge.

You wouldn’t book a flight without comparing options, would you? Why should shopping for monetary services be any different?

SuperMoney makes financial comparison shopping easy. Compare rates, terms, and features on thousands of products and services in one place. Life insurance or loans, use their tools and you've got yourself another strategy to keep your bills and balances low.

No Financial Advice. This article does not provide financial advice and has been prepared without taking into account any person’s investment objectives, financial situation, or particular needs.