10 Smart Ways To Settle Your Debt Fast

1. Pay More Than The Minimum Payment

Whether you’re carrying credit card debt, personal loans, or student loans, one of the best ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only help you save on interest throughout the life of your loan, but it will also speed up the payoff process. To avoid any headaches, make sure your loan doesn’t charge any prepayment penalties before you get started.

2. Try The Debt Snowball Method

List all of the debts you owe from smallest to largest. Throw all of your excess funds at the smallest balance, while making the minimum payments on all your larger loans. Once the smallest balance is paid off, start putting that extra money toward the next smallest debt until you pay that one off, and so on. Over time, your small balances should disappear one by one, freeing up more dollars to throw at your larger debts and loans.

3. Have A Side Job

Earning more money can amplify your efforts even further. Nearly everyone has a talent or skill they can monetize, whether it’s babysitting, mowing yards, cleaning houses, or becoming a virtual assistant. With the availability of the internet, anyone can find some way to earn extra money on the side. The key is taking any extra money you earn and using it to pay off loans right away.

4. Cut Your Expenses

If you really want to pay down debt faster, you’ll need to cut your expenses as much as you can. One tool you can create and use is a bare-bones budget. With this strategy, you’ll cut your expenses as low as they can go and live on as little as possible for as long as you can. Devoid of any “extras” like going out to eat, DStv, or unnecessary spending. While you’re living on a strict budget, you should be able to pay considerably more toward your debts.

5. Sell Everything You Don’t Need

If you’re looking for a way to drum up some cash quickly, it might pay to take stock of your belongings first. Most of us have stuff lying around that we rarely use and could live without if we really needed to. Why not sell your extra stuff and use the funds to pay down your debts? A good old-fashioned garage sale is normally the cheapest and easiest way to unload your unwanted belongings for a profit.

6. Ask For Lower Interest Rates On Your Credit Cards

If your credit card interest rates are so high it feels almost impossible to make headway on your balances, it’s worth calling your card issuer to negotiate. Believe it or not, asking for lower interest rates is actually quite commonplace. And if you have a solid history of paying your bills on time, there’s a good possibility of getting a lower interest rate.

7. Consider A Balance Transfer

If you agree to settle your debt, don’t send the collection agency any money until you get a faxed or scanned letter saying that they’ll accept your payment and that the payoff will absolve you of any future legal obligation for that debt. After you get that, you’ll have to send over the money within a day or so, which means it’s not a good idea to agree to a settlement unless you have cash in hand.

8. Use ‘Found Money’ To Pay Off Balances

Most people come across some type of “found money” throughout the year. Maybe you get an annual raise, an inheritance, or bonus at work. Or maybe you count on a big, fat tax refund every spring. Whatever type of “found money” it is, it could go a long way toward helping you become debt-free.

7. Get the Agreement in Writing

Each time you come across any unusual sources of income, you can use those dollars to pay off a big chunk of debt. If you’re doing the debt snowball method, use the money to pay down your smallest balance. And if you’re left with only big balances, you can use those dollars to take a huge chunk out of whatever’s left.

9. Drop Expensive Habits

If you’re in debt and consistently coming up short each month, evaluating your habits might be the best idea yet. No matter what, it makes sense to look at the small ways you’re spending money daily. That way, you can evaluate whether those purchases are worth it and come up with ways to minimize them or get rid of them.

10. Avoid Temptations

We’re all tempted by something. For many, it might be the local mall or our favorite online store. For others, it might be driving by a favorite restaurant and wishing we could pop inside for a favorite meal. And for those with a penchant for spending, having a credit card in their wallet is too much temptation to bear. Whatever your biggest temptation is, it’s best to avoid it altogether when you’re paying down debt.