How To Get Out Of Debt Fast

It’s great FREE tool to use! With personal capital you can track your debt, credit cards, loans and even create a budget. Their online dashboard lets you see how much money you’re spending, how much money you’re making, how much money you owe, and how much you have invested. All in one place!

3. Create a Plan to Attack Your Debt (Avalanche or Snowball)

Now that you know what you are facing, you can make a plan to deal with it. You should have a good idea of how much money you have leftover each month that can go to paying off your debt. You need to prioritize your debt, and there are several different ways to approach it. It will depend on what your interest rates are and how much debt you have. If you have a variety of interest rates, you could start with the debt that has the highest rate. It will save you more money in the long run. This method is known as the avalanche method. It takes more determination and is easier to get off track, so that is why the majority of the time we recommend the snowball method.
With the snowball method you start with the lowest debt balance and work your way to the largergest. As you start paying off the smaller debts you will start to gain momentum just like a snowball rolling down the mountain. You will feel definite progress as you move through your debt, and it helps to keep you motivated. If you want to be debt-free, you need to make a plan and stick with it to get through your debt. As you get through your debt, make sure that you stay current on all of your accounts. If you fall behind, you might end up with a higher interest rate, which will make your debt more expensive.

4. Look at Refinance Options and Negotiate Lower Interest Rates

Once you know what your debt is, you can look at refinance options. For example, if you are able to drop the interest rate on your auto loan by a few percent, it will make your loan payment less and the entire loan will cost you less money. The same applies to your mortgage. If you have credit cards with higher rates, it is worthwhile to call them and try to negotiate a lower interest rate.

Many credit cards have a built-in rule that they will raise your interest rate if you fall behind. You could end up seeing your rate go from 12% all the way to 29%. If you are paying your card on time, you can call and ask them to reduce your interest rate. They will often work with you if you only had one or two late payments in the past.

When you call them, let them know that you want to continue doing business with them, but tell them that you have other options. Tell them that you can’t afford this interest rate and that you might have to look into other options. If they believe that you plan to replace this debt with a lower interest rate card or loan, they will likely be willing to negotiate a lower rate. Just be sure to make your payments on time because they are unlikely to do this for you more than one time.

5. Debt Consolidation

If you have a lot of different credit accounts, you are likely to be paying higher interest rates on some of them. You have to keep track of a number of payments and make them on time every month. You can make life a lot easier by consolidating this debt into one loan. You should make sure that the new loan has a lower interest rate, and it will make it a lot easier to pay your bill on time each month.
It is important to remember that you should not use your credit cards once you consolidate your debt into one payment. If you continue to use them, there is a good chance that you will wind up in the same situation again, but you will have even more debt. Remember that the point in consolidating your debt is to pay it off and get out of debt.

6. Do Not Open New Accounts

This may be obvious, but if you are trying to get out of debt, you should not add to your debt. As tempting as it can be, you need to resist the urge to open new accounts that will contribute to your debt. Sometimes people see some progress, and they feel that they can afford one more payment. They will open another account, and before you know it, it is past the point of being paid off each month.

The key is to remember that once you get out of debt, you will have extra money. All of the money that you are paying toward your debt right now will be extra money you have to work with. However, to get there, you need to pay the debt off. Remember, don’t open any new credit accounts while you are paying off your debt.

7. Overpay Your Credit Accounts Each Month

Once you have prioritized your debt accounts and know which one you plan to pay off first, be sure to overpay the debt at the top of your list. For example, if you have a card that has a $100 monthly minimum payment, you can take your extra money that is designated for your debt and pay whatever you can. This will cause the debt to go down more quickly, and it will lower the interest that you have to pay.

8. Reduce Your Expenses

You should look at your expenses to see where you can cut out things you don’t need. People often have monthly fees for online music apps, streaming services, and cable television. You need to look at all of these costs and determine what you need. You can limit yourself to one streaming service and eliminate your cable. Also, cutting back on eating out, coffee shops and unnecessary amazon purchases can save you thousands each year.  Take a look at your lifestyle to see what you can cut out to help pay off your debt. It’s important to note that these changes will be sustainable. You might be able to cut out enough money to double your credit card payment each month. You will be amazed at what you pay for that you really don’t need each month.

9. Start a side hustle

Any extra money you can generate to put towards debt is huge. That’s why starting a side hustle is a great idea.  A side hustle could just be a part time job until some debt is paid off, or it could be something you’re passionate about.

Who knows, maybe your new side hustle could end up being your career.

We have some great ideas for you to check out: 28 ways to make money online

10. Ask for a raise.

It doesn’t hurt to ask for a raise. Just be sure you have put in the work and add value. Also, be prepared to negotiate.  If you do get the raise put that extra amount towards debt each month.

11. Sell Anything You Don’t Need

If you are looking to come up with a large payment to pay off debt, you can go through your personal belongings and find things that you don’t need. You can sell them and use the money to pay off your debt. For example, people sell everything on social media sites such as Facebook, and you can easily list old clothing, electronics, toys, books, and more. If you have things that are just taking up space in your home, sell them, and use the money to pay off your debt. 

12. Get a Card with a Balance Transfer

You may already have a credit card with a balance transfer, or you can sign up for a new one. These cards often offer 0% interest for a period of time, and it can save you a lot of money. If you have decent credit, you can consider using this strategy to reduce the cost of your debt and get it paid off sooner. 

13. Settle Charge Off Debt

If you have credit cards that have been closed and charged off, a good way to pay them off is to call and negotiate a settlement. If you have saved up the money to settle one of these accounts, you can sometimes settle it for 50% of the amount you owe. This will be reflected on your credit report, as they will mark it settled for less. Also, be sure to look into any fees and accrued interest which can cut into your savings. Another thing to remember is you will also need to declare it on your taxes. However, it can help you get your debt paid off more quickly.

14. Student Loan Forgiveness

Student loans are a big problem these days. The average student loan debt is more than $31,000 and significantly more for students with advanced degrees. There are many student loan forgiveness options available and it’s always worthwhile to look into.
If you work for a non-profit or the government you may be able to apply for public student loan forgiveness.

Medical professionals, Nurses and military personnel can potentially find programs through their employer. 

Teachers will be able to apply for the Teacher Loan Forgiveness program. If you have a qualifying disability you can apply for the Disability Discharge Student Loan Forgiveness program. 

Another program that may be available to you after 120 consecutive payments is the Public Service Loan Forgiveness.

Do some digging and see what is available to you, also consider contacting a financial counselor to help you.

15. The Last Resort:Bankruptcy

Bankruptcy is a last resort option for becoming debt-free, but if your debt is completely out of control, you might consider it. Usually, people get into this position after suffering a financial crisis or an emergency such as illness, job loss, or divorce. There are several ways to go about declaring bankruptcy, so you will want to consult with a bankruptcy attorney before going this route. 

Final Words

Debt can be overwhelming, and it can cause a great deal of stress in your life. It can happen for many different reasons, and it is important to get control of it as quickly as you can so that you can improve the quality of your life. The first step is to paint a clear picture by creating your lists. The second step is to create your budget and third is to create your plan!

Once you have your plan, you can get to work to eliminate your debt. There are different ways to handle it, and it all depends on what your debt is. Once you make your plan, stick to it, and you will gain motivation as you see the numbers on your spreadsheet go down each month. Now go bust that debt! Thanks for reading!