10 Easy Ways To Pay Off Debt Fast

Debts are the worst hinder in our journey to become financially independent. Every individual is now under a huge burden of debt to pay. From mortgages, student loans, house loans, car loans to credit card bills, debt is increasing, and consuming our financially stable life at a rapid rate.

In a recent survey, it was found that Americans are $ 12.58 trillion in debt and this a whopping amount. An average American household owes $16,091 on their credit cards, and this is serious.

Fortunately, there are lots of ways to deal with ever-climbing debt. Let’s see The 10 Easy Ways to pay off your debt fast.

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1. Stop Creating More Debt

It is as simple as it is. If you want to pay your debt, keep that in your mind NOT TO CREATE MORE DEBT JUST TO PAY OFF YOUR PREVIOUS DEBT. Most people do that, they take loans to pay the existing loan and cycle goes on. Stop creating more debt, it will be beneficial.

It’s high time to stop your bad habit of creating endless debt on your chest. Because once started there is no end. Your first step towards paying off your debt is to avoid more debt.

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2. Pay More Than the Minimum Balance

Paying more than the minimum balance is one of the best ways to avoid compound interest rates. If you pay only the minimum payment you end up paying more on the interest rate.

Paying more than the minimum due not only saves you from everlasting high-interest rate but it also improves your credit score which, in turn, helps you to take the greater loan at low interest. And you can also reduce your credit utilization ratio.

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3. Avalanche Method to pay Debt

Most Famous and well-known method of paying off your debt. It can prove to be financially beneficial in the long run. Debt Avalanche is a process of tackling down the debt with the highest interest rate. It is more convenient and money-saving.

Let’s assume you have three debt with yearly interest rate:-

  1. $ 10000 Student loan with 12%
  2. 25000 $ house loan with 6%
  3. $ 8000 Credit card debt at 8%

In this situation, according to Avalanche, you should be paying the student loan first. Debt avalanche can save you a good amount of money in interest payment.

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4. Try the Snowball Method

If you are not impressed by the Debt Avalanche method, you can try another well-known method of paying debt and it is SNOWBALL METHOD. In debt snowball, you tackle the one with the lowest amount of debt.

Let’s take the same example as above.

  1. $ 10000 Student loan with 12%
  2. 25000 $ house loan with 6%
  3. $ 8000 Credit card debt at 8%

In the debt avalanche, you were paying student loans first, But according to DEBT SNOWBALL, YOU WOULD BE PAYING THE CREDIT CARD DEBT FIRST.

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5. Pay your Debt In Monthly EMIs

If you have an enormous amount of debt and you are not able to pay it in a lump sum amount ask your credit provider or bank and request them to convert lump sum amount into monthly installments. However you have to give 2-3% more on monthly EMIs, but it is still better not paying it at all.

It allows you with a facility to pay your debt monthly in a small amount rather than the whole outstanding amount at once which you hardly afford. In this way, the burden of debt will start diminishing and you start feeling better about your financial condition.

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6. Consider Using Balance Transfer

If you are already under a huge amount of debt and find it difficult to pay, a balance transfer can certainly work for you. A balance transfer is a process to move your existing balance to another credit card with a lower interest rate (usually 0 to 4 %).

Many credit card services offer a low-interest credit card to attract customers. But most importantly you have to keep in mind that you have to pay off debt before the balance transfer expires, or else you have to deal with much higher interest rate after. Do it carefully and you can surely save money to pay off your debt.

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7. Ask For Lower Interest Rate

Negotiating is not at all bad practice. We all know how higher can our debt interest rate be. And it sometimes becomes troublesome to pay such an outstanding amount of interest.

Negotiating for the lower interest rate is so common and you can try it for no shame. And if your Cibil score is better you can easily get a loan at a much lower interest rate. Ask Your creditor for loans with lower interest rates can save you a lot of money.

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8. Start a Side Hustle

So you know about Avalanche, snowball, about lower interest rest or paying more than the minimum. But what if you don’t even have enough money to pay? What if whatever you are earning is spending on your expenses and you have 0% saving?

Don’t worry, you can side hustle in your free time and can earn a spectacular amount of money. Whether you are a student or employee there are lots of ways you can earn from home. This not only utilizes your time but also generate enough income so you can start paying your debt.

You can also check out our 45 Side Hustles Ideas For College Students

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9. Cut Off Unnecessary Expenses

An unaffordable lifestyle is one of the major causes of debt all around the globe. We know we can’t afford that luxurious car but only for the sake of showing off, we end up buying it using car loans. Then for so many years, we keep paying the unnecessary EMI.

It’s not only about Car, we usually do it with everything. We often spend our valuable money on unnecessary or unaffordable things and the only thing we do later is regret.

Cutting down your expenses or leaving an unaffordable lifestyle not only saves you from a huge amount of debt. But it also saves you with enough money to pay your existing debt.

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10. Create a source of Passive Income

If you have a constant flow of money for which you have to do no or little work, it can prove big support in your financial life. Generally, we take loans because we usually have one source of income and that is our job which sometimes fails to manage our expenses.

Passive income is always beneficial in any condition. You can apply it here too. Create a source of passive income not only helps you financially to pay off your debt but also create a lifelong cash flow, so you can avoid taking debt afterward.