Let’s face it; debts can cripple you and kill your dreams of getting financially independent. In most cases, they sap your energy and kill your productivity, thereby making it incredibly difficult to move ahead in life. It’s even worse when they keep mounting due to factors like growing interests and additional financial obligations. Getting out of that vicious cycle may look like an impossible task and even end up being a source of anguish.
But paying off debt doesn’t have to be too difficult. With enough dedication, patience, and determination, you can eventually buy back your freedom. Here, we show you six smart tips that you can use to get off debt quickly. We also recommend that you check out Crediful.com for more information on getting your finances in order.
Cut your spending
This is probably the easiest yet most challenging tactic you can use to pay off your debt fast. The reason a lot of people find it challenging to go down this route is that it comes with changes in lifestyle – some which can seem too drastic to implement. For example, if you visit your favorite coffee shop several times a week to catch up with friends, skipping those meet-ups can seem quite difficult for you at first. What will your friends think? How about the missed fun?
The good news is that the savings you make by reducing your expenses on these mere wants can add up quickly and help you dig yourself out of the distressing debt pit. Sit down and list all your wants and necessities, decide on what expense you can cut off easily, and commit to transferring any money saved to your debt repayment.
Use windfalls to pay off debt
Received a bonus at work that you didn’t expect? Just had your tax refunds remitted to your bank account? Well, this is not the time to spend it on that new phone you’ve been planning to buy for some time. Instead, use this ‘found money’ to pay off your debt.
Negotiate for lower interest rates
High interest rates can significantly hamper your chances of getting out of debt quickly as most of your payment is eaten up by the interest charges. If you have a good reputation with creditors and credit card issuers, how about you ask them to lower your rates on the promise that you’ll clear your debt more quickly. This simple action can save you hundreds of dollars in loan fees.
Pay more than just the minimum amount
One of the most effective ways to pay off debt fast is to pay more than the minimum monthly payment set by your creditor. By doing this, you should be able to reduce the total amount of interest paid while also speeding up the debt repayment process. An excellent place to start is to use the maximum possible savings from other areas of your life to clear the debt. So, if you saved money on a few lunches or worked overtime during the month, apply these extra savings and income to pay your debt. A caveat, though, is that you need to ensure your loan issuer doesn’t charge a penalty for prepayments, as this strategy will likely not apply in such cases.
Start a side hustle
Cutting expenses and using the resulting savings to repay debt is an effective strategy in its own right, but looking for ways to add more money to the table is an even quicker way to amplify your efforts further. Do you have a talent or skill you can monetize to bring you some extra income? This is an appropriate time to showcase and use it to make some money to pay off your debt bills.
The best part about it is that nearly everyone can find some form of income-generating work to do on the web today, thanks to platforms like Upwork and Fiverr. If you’re able to make additional money on the side, try to channel most of it towards your debt repayment.
Avoid making debt repayment too miserable
This will probably sound counterintuitive, but you do not have to sacrifice everything in your life to get out of debt. Sure, you need to make savings and adjust your lifestyle to speed up the process. However, you also have to acknowledge that some changes require time to implement if you’re to avoid overwhelm. Be patient with yourself, but remain disciplined to the cause that is debt repayment.
What are some of the challenges you’ve been facing in your journey to pay off your debts? We’d love to hear your feedback!