Running into debt can be overwhelming, which is why we’ve come up with these 7 ways to get out of debt fast. Irrespective of the kind of debt you’re in right now, be it credit card debt, auto loans, student loans or personal loans, there’s a way you can escape from it.
However, clearing up your debts could be brain-racking and somewhat difficult especially when allowed to accumulate longer than necessary. The good news is there are easier ways to go about clearing up that debt.
Although there is no one specific way to do so, there are dozens of proven ways to get off debt but in this blog, we would only discuss 7 tips to easily get off debt quickly, so you can focus on other important financial issues.
7 Great Usefull Tips on How To Get out of Debt Quickly
1. Make a Debt Payoff Plan
Setting goals and making plans is one sure way to getting things done, thus the saying he who fails to plan plans to fail. Making plans helps you track your monthly spending which helps you identify areas you spend more money and cut down on such areas. Thereby ensuring you are spending more than you earn.
A good plan is more like having a budget, and we all know that budgeting helps keep one on track. There are different methods to take in making a debt payoff plan, the two most popular methods are the debt snowball and the debt avalanche method.
The debt snowball approach suggests starting with the smallest interest balance in paying off debt, which offers you a psychological boost, and on the other hand, the avalanche approach suggests starting with the highest interest debt. It may take longer to pay off but takes away the greater loan burden faster.
It doesn’t matter the method you chose, what matters is making a plan and staying through to your plan. A good plan can keep you on track while helping you aim for your financial target.
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2. Paying More Than the Minimum
Paying more than the minimum monthly amount is another sure way to easily get out of debt. That little amount you keep adding to the minimum amount has a way of snowballing into making you get off debt faster than expected and also reducing the interest rate to be paid.
It’s also important to understand that the amount paid monthly includes the principal component and interest component. Which is the fraction of money you owe and the monthly finance charges attached to the money owed. This implies that every time you pay in more than the minimum, you lower both the principal amount and interest amount to be paid faster.
So, if you stay through to paying in a little above the minimum, be sure to take off a bigger chunk of what you owe and be sure you are on the pathway of getting off that debt faster than expected.
3. Work Part Time
Working part-time is one way of earning extra and earning more means paying in more every month which makes you get off debt faster. Simple mathematics right? Therefore, working part time is one of the 7 ways to get out of debt fast
Plus, picking up a part-time job brings in the extra cash you could put together to pay off. You can decide to work for a short period, or at least work until you have earned enough to get off that debt. Working part-time to become debt free doesn’t work for everyone because of how tasking it could be as you would have to work extra hard for that season but bet me, if you can make it work, the impact on your financial balances will be massive.
You can turn your hobby or skill into what generates money for you part-time. For instance, if you are a skilled writer, you can sign up as a freelance writer, writing for blogs and other publications, if you are skilled in any musical instrument, you can start performing, if you are a good artist, you could decide to start drawing and selling off your artwork. Once you have chosen the best part-time work that works for you, do well to apply all your extra income to debt repayment.
4. Sell the Stuff You Don’t Need
Selling what you don’t need is another quick way of making extra cash to accelerate debt payment. Plus instead of the unwanted stuff taking up your home space, you can go through them, see what you don’t need again, and sell them off to someone who finds them valuable and needs them.
Asking yourself questions like, When was the last time I wore that shoe or used that DVD, or that other electronic device or anything you haven’t used for the space of 6 months or a year, can help you decide on what to sell. If it is valuable, you can sell it and use the cash to pay off debt.
You can sell off you’re on outlets like eBay, Decluttr, and Blu-rays or you can decide to sell privately through Facebook, OLX, Gumtree, etc.
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5. Cut on Your Spending
You cannot do without downsizing or cutting on your spending if you must get off that debt quickly. You need to reduce your monthly expenses to the nearest minimum, it will require you to change your lifestyle, cut back on excessive spending, take away the non-essential expenses and spend only on the essentials. The more you avoid spending on what you want but do not need the more money you save.
Here are some of the ways you can cut down on spending.
- Avoid eating out (in restaurants)
- Quit impulse buying
- Consider deferment.
- Only spend on what matters most
- Make the most of “monthlies”
- Save on interest where
- Stick to your budget etc.
6. Pay off your most Expensive Debt First.
One smart way of getting out of debt is to first and foremost focus on paying off the debt with the highest interest rate. Once that is paid off, move to the next debt with the second highest interest rate and focus all your extra money on paying it off too, continue this process until you are left with your less expensive debt. It’s also important to note that this doesn’t stop you from making minimum payments on all other debts.
One good thing this does to you is that you can easily see the progress you make which can be a source of motivation to push more.
7. Negotiate with your Creditor
Last but not the least on our top 7 ways to get out of debt fast is negotiating with your creditor. Debt negotiation, also known as debt settlement or debt reduction, is a situation where the lender agrees to forgive a large part of the debt or completely wipe off the interest rate. This is possible only when you’ve been a reliable borrower in the past, then you can negotiate with your lender to consider an interest reduction or find other ways to make your debt more manageable.
As against what we think, lenders are usually willing to negotiate with debtors who want to pursue other arrangement payment plans to better manage their debt especially when faced with situations beyond their control. For example during the Covid-19 pandemic, lenders were more open to negotiations as long as you contacted them.
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Conclusion
Getting off debt can be made easier with a little strategizing and planning. Taking any of the steps above can give you a soft landing when it comes to clearing up that desk. Just decide on which works best for you and apply it. You can decide to apply two or more of those approaches at the same time to boost your expected result.
Again the 7 ways to easily get off debt include: make a debt payoff plan, pay more than the minimum, work part-time, sell the stuff you don’t need, pay off your most expensive debt first, and negotiate with your creditor.