How to Pay off Debt Fast

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You can pay off debt fast, but to get there, you’ll need a plan and determination. Most people want to get out of debt but aren’t sure how to get started.

Here is an interesting statistic; I hope you’re sitting down. According to the annual Planning and Progress Study published by Northwestern Mutual, the average American now has $29,800 in personal debt.

Gen X reported the highest levels of personal debt with an average of $36,000. Baby Boomers reported debts of $28,000, Millennials $27,000, and Gen Z $14,700.  What’s even more worrisome is that one-third of those people said the interest rate they are paying is greater than 15%.

If you ever find yourself in a situation like that or if you have personal debt that you want to pay as quickly and painlessly as possible, here are 9 strategies to help you get out of debt fast.

1. Stop using your credit cards, so the debt stops growing

If you expect to pay down your debt, you’ve got to stop the bleeding first; this means that you can’t add more debt. Seriously, put a freeze on your credit cards.

Go ahead and follow these steps.

Step 1: Remove your credit cards from your wallet.

Step 2: Put them inside a bag of water and dump the bag deep inside the freezer.

Step 3: Cut them up or fully destroy them so that you can’t use them at least until you’ve paid off the debt.

The point is you got to this point because you spent money you did not have; you don’t want to keep doing that, do you?

Yes, it’s easy to buy things by simply tapping or swiping a credit card, but unless you want to be stuck paying interest for the next 20 years, you’ll want to make the necessary sacrifices.

How about those reward points you love?

Everyone loves those reward points, but know this – credit card companies use that as incentives to get you to spend more. Before you can implement a debt reduction plan, you have to stop adding to the debt load, so stop using that credit card.

Yes, getting reward points sounds nice, but if you’re in debt, those reward points are not worth it when compared to the interest fees you’ll pay. To pay off credit card debt, you have to stop using those credit cards – no way around it.

2. Lower your interest rate

Few people try this option, but it’s an effective way to pay off debt; all it takes is a phone call and about ten minutes of your time.

For example, many credit cards charge an APR rate of 19%; you can request the credit card company to drop that rate to say 10%. If you have a good payment history, chances are the credit card company will approve your request.

So, if you find yourself carrying credit card debt from one month to the next, a lower interest rate means you’ll be able to accelerate your chances of paying off that debt.

3. Find out how much debt you really have

There nothing worse than trying to pay off debt without knowing how much debt needs to be paid. If you are serious about paying off debt fast, the first step is to create a debt payoff plan.

Are you ready to pay off your debt fast? Use this tool to summarize how much you owe.

Click Here to download the file. The tool looks like this:


Remember, one of the first steps to getting out of debt fast is to create a debt payoff plan. The above tool helps you summarize how much money you owe and plan out how much you’ll pay off each month.

You don’t want to keep paying the minimum; that’s exactly what credit card companies want you to do so that you’re in debt forever. You need a plan that helps you see the light at the end of the tunnel, and that light comes in the form of the debt payment plan.

4. Pay as much as you can each month

To find out how much you can pay each month, you’ll need to figure out your income and how much money you’re spending per month. If you don’t have a budget, now is a good time to start one.

Budgeting Binder Planner

This 31+ page printable digital binder planner will help you take control of your finances, and set clear financial goals, so that you can get out of debt.

A quick and easy way to figure out your budget is by using the 50/30/20 rule.

This can serve as a guide to find out how much you can afford to cover personal loans and savings. 

You aim at paying off as soon as possible any debt that does not make you money. That includes debt such as credit card or consumer debt.

But don’t forget to build an emergency fund; this does not need to be three months of income, but any amount that can help you pay for emergencies such as $1,000 or $2,000.

The 50/30/20 Budget

Monthly after-tax income (required)

How much you have for:

Savings & Paying off Debts:

5. Create a debt payoff plan

Now that you know how much money you owe and how much you can afford to pay, you’re able to strategically plan who to pay and how much.

To do this, you can choose between the debt avalanche and the debt snowball methods.

With the Debt Avalanche method, you pay the most to debts with the highest interest while paying the minimum to all remaining debts.

For instance, if you have a student loan with an interest of 7 percent and credit card debt with an interest rate of 19%, you should pay as much as possible to the credit card while paying the minimum to the student loan.

This way, you clear out the most expensive debt first, which saves you time and money.

The debt snowball method, on the other hand, takes into account your emotions. That’s right, especially for people who have multiple debts, with different due dates and statements coming your way. It can be overwhelming to keep track while keeping motivated.

The Debt snowball method involves paying off the smallest debts first regardless of the interest rates charged.

For example, let’s assume you have two credit cards. The first card has an interest rate of 11%, and you owe $650; on the second card, the interest rate is 19%, and you owe $5,000 on that card.

Which credit card do you pay off first?

 According to the debt snowball method, you should pay off the $650 first, even though that debt has a lower interest rate. But that sounds counterintuitive, doesn’t it? It actually makes sense.

The reason is that it is much easier to pay off small balances instead of juggling with multiple accounts.  You’ll pay more interest in the long run, but it’ll be easier to keep motivated as you reduce the number of accounts faster.

The debt snowball method gives you a sense of achieving progress faster as you are counting on small wins to keep yourself motivated.

6. Focus on one debt at a time

Whether you choose the debt snowball or the avalanche method, the point of both debt payment methods is focusing on one debt at a time while paying the minimum in others.

Focusing on one debt at a time will help you to gain progress in paying off debt quickly by putting all your energy into paying off one account vs. dealing with multiple accounts and multiple due dates.

Balance transfers

Combine and conquer! One great way to focus on paying off one debt at a time is by Transferring your credit card balance to a different card with a lower interest rate.

So, if you owe money on an account with a high-interest rate, you can transfer the balance to an account where you pay a lower rate. For example, some credit card companies have promotional offers 0% APR for 3-12 months.

When done correctly, this strategy can expedite your debt pay-off plan. The part where it goes wrong is when you do a balance transfer to a low-interest card and continue using the high-interest card. That’s when you’ll end up even deeper in debt.

Thus, if you transfer a balance to a lower interest account and then focus all your efforts on paying off that one account, you’ll get out of debt quicker and pay less money in interest fees.

Pay credit card debt with a personal loan.

Financial institutions often make offers for lines of credit at low-interest rates or consolidation loans. Thus, using personal loans to pay off other high-interest debts will help you become debt-free quicker.

Additional benefits include the following:

  • Personal loans and consolidation loans typically have a lower interest rate than credit card or consumer debt. If you qualify for this type of loan, it makes sense to use them to pay more expensive credit card debt.

Consolidation loans improve your credit score. Consolidation loans will appear as a new account, while other accounts with longer history will appear paid off.  So, if you get a consolidation loan to pay off credit card debt, it will immediately benefit your credit score.

7. Reduce your spending

Track your spending by noting where your money is going. The key is to spend less than what you make each month while setting aside funds for an emergency fund and to pay off debt.

To do this, start by categorizing your expenses such as housing, food, transportation, and entertainment. Then pinpoint the areas where you can cut back.

Our Budgeting binder planner is a great resource to help you achieve this.

Avoid costly hobbies. Do you really need to spend on that gym membership that you don’t use?

Some painless ways to cut back on your spending include planning your purchases instead, bring lunch to work instead of eating out, and negotiating a better deal on monthly costs like your internet, car insurance, and cell phone.

And if you want to become debt-free even quicker, making changes to your spending habits can go a long way.

For example, by cutting out daily coffees for $3 daily and daily lunches for $9 daily, you could save $12 each day. This works out to over $3,000 in savings per year, which you could then use to pay off debt more quickly.

For more information, see our savings calculator here for easy savings opportunities.

Read More: Check out our FREE calculators and tools to help you crush your debts!

MyHomeAnswers’ free tools help you take control of your money, make sense of your debts and stay on top of payments.

8. Use lump-sum payment you receive to pay off debt

When you receive a lump-sum payment like a tax refund, a bonus, or even a salary increase, use those funds to pay down debt. The issue is that when people get more money, they increase their spending; that’s the wrong approach.

This is one of the best ways to get out of debt fast is to use windfalls like tax refunds, bonuses, and salary increases to pay debts; you’ll be saving money on interest fees, and you’ll become debt-free sooner.

9. Start a side hustle to increase your income.

Paying down debt becomes a lot easier when you earn extra income from a side hustle. If you then use the extra funds to pay off debt, this can accelerate your payoff efforts in a big way.

There are endless ideas for side hustles that allow you to make money without getting a second job.

Click Here: 21 Simple Ways To Make Extra Money

Bonus: Turbocharge your debt payments by getting a salary increase.

The easiest way to earn more money is by asking for a salary increase. You can then use those funds to accelerate your debt payments. Our Salary Negotiation Online Course is an interactive course where you will learn how to effectively ask for a raise.

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