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Depending on how much debt you have, you will probably be on this journey for years. That is perfectly OK…this is a journey after all. However, you absolutely can do yourself a favor by speeding up the process.

There is no secret here. You do have to work hard and be consistent, but there are a few things you can do to pay your debt faster:

1) Choose and stick to a pay off strategy

You’ve probably heard of a couple of debt payment methods.

The Debt Snowball Method

Focus on paying down your smallest loan first by putting any extra payments to it and paying only the minimum on the rest of your debts. Once that smallest loan is paid off, “snowball” those extra payments into your next smallest loans and repeat.

This is great for you if you need wins to celebrate more frequently to stay motivated. Keep in mind: This method may cost you more in interest and time.

The Debt Avalanche Method

Focus on paying down your loan with the highest interest rate (usually credit cards) first by putting extra payments toward it and paying only the minimum on the rest of your debts. Once that loan is paid off, roll over that payment into the next highest interest rate loan and repeat.

You may spend more time paying down one loan here, but it helps to look at it as a big picture. This is how I prefer to pay down my debts and it will allow you to pay them faster and pay less in interest.

Highest Minimum Payment

This method isn’t really mentioned anywhere, but I think it can work great. Focus on your debt with the highest minimum payment (aside from your mortgage, so usually a car and/or credit card). Pay the minimums on the rest. Once that loan is paid off you’ll free up a huge chunk of a minimum payment and you can roll that over into the next using any method.

Without a plan you may be paying down a decent amount of debt, but not making great progress.

For example, I was speaking with a co-worker who told me she was paying so much toward debt but it wasn’t really going away. She was about to pull money out of her retirement savings!

I asked her how she has been making payments and she said she’s been putting extra to her mortgage (a very low interest loan), extra to her student loans (even though they’re in forbearance and at 0% interest due to the pandemic), and putting extra to her credit cards (which is what she wanted to pay off).

I suggested she stopped making any payments to her student loans, stop extra payments to her mortgage, and focus all that money on her credit cards instead. She realized if she did that she would have her credit cards paid off in a few months without touching her retirement savings.

Any method you choose will speed up the process, but the fastest would be the debt avalanche.

2) Review your budget/bills

It’s important to regularly review your expenses so you can cut out those things you aren’t using and/or stop spending on things you really don’t need temporarily.

For example, you could cut cable for a few months and put that money to your debt instead. You could hold off on getting your nails or hair done so frequently.

Another important thing to look out for are expenses that you can shop around for. This includes your car insurance, renter’s insurance, phone provider, etc.

I recently switched my renter’s insurance from Statefarm ($13.83/month) to Geico ($6.42/month). I bundled my car insurance with this coverage and now I’m saving $90 a year! It’s not huge, but when you move many expenses around it adds up.

Then those savings can go toward your debt and you’ll make more progress.

3) Ask for a lower interest rate

If you have revolving credit card debt, call each company and ask for a lower interest rate.

This is what I did when I first started my debt free journey and all of them except for one lowered my interest rate. It may be a temporary decrease or a very small decrease (1-2%), but it will definitely help you to save more money and pay debt faster.

This is because less interest will be accruing on your debt and your payments will make a larger dent.

4) Consider a balance transfer

Balance transfers aren’t a fit for everyone, so be careful with this one!

With a balance transfer you transfer an amount from one loan to a credit card, usually with a fee of 3-5%. You’ll then have this new loan with a 0% interest rate for probably 12 months.

Who is a good fit for a balance transfer?:
-You have several thousand in high interest credit card debt
-You trust your ability to pay down the transfer within the promotional period

Who is NOT a good fit for a balance transfer?:
-You only have a couple thousand in high interest debt (the balance transfer fee may not make the interest savings worth it)
-Your interest rate is already low
-You’re thinking of transferring a low interest rate, but are unsure if you can pay it down during the promotion period (you could go from a 6% rate to >20% if you don’t pay in time)

I often recommend balance transfers to my clients based on these points.

A couple of years ago I did a balance transfer of about $6K of my student loans. I found it to be a bit stressful because emergencies kept popping up making it difficult for me to pay on time. I did end up paying it all off before the promo expired and saved several hundred, but for that situation I wouldn’t repeat it.

Click here for a video going into more detail.

5) Consider consolidating

A balance transfer is a form of consolidating, but with this tip I mean consolidating all, or the bulk of your debt into one.

This is usually a personal loan. You can then have one interest rate and one monthly payment.

Again, be careful with this one and make sure it is worth it.

Who is a good fit?:
-You have a decent credit score
-You have high interest debts
-You can afford a large monthly payment
-You expect to pay off this loan within a few years

6) Pay down debt more often

To start, if you have a lump sum of cash you’re planning to put toward your debt…do that ASAP. A lump sum will immediately save you from accruing interest and will definitely help you pay your debt faster.

However, if you get paid weekly or biweekly OR you make extra cash here and there…try paying down your debts more frequently. The more often you lower your balance, the less interest will accrue.

Before the student loan forbearance, my loans were accruing over $5 in interest daily! I tried my best to throw as much as I could to my student loans in order for less interest to accrue each day.

If you haven’t already, now is the perfect time to join us on Transfer Tuesdays! We focus on making money moves every week so we make regular progress and make a habit out of saving, investing, or paying down debt. Even if you can only spare an extra $1 toward your debt, it’s worth it!

7) Stay motivated

Paying off debt is difficult and exhausting. Trust me, I know.

This is why it is so important to stay motivated.

Always reflect on your why when you feel your motivation slipping. Why did you start this journey in the first place?

To be financially free? So you don’t owe anyone money? So you can do work that you enjoy? So you can start aggressively investing?

Visualize and imagine what it will feel like the day you reach debt freedom!

Another way I stay motivated are with debt trackers. I have a large thermometer in my living room, a couple of trackers on my fridge, and one in my notebook. It’s so fun to color in your progress and have a visual.

Finally, be a part of the debt free community by watching and engaging with YouTube creators, bloggers, Redditors, etc. You are not alone and there are many people who understand what this is like. Let that inspire you!

At the end of the day, the most important thing is that you’re taking care of your basic needs (home, food, warmth, transportation to work, etc.) and making the minimum payments on your debts.

But if you’re looking to speed up this journey, try these out and you’ll see the results!

Do you have any other tips to share that would help others pay their debt faster??