As anyone with debts will already know, life can be very depressing when you have a lot of money to pay back to various creditors. Being in debt can affect your life in many different ways, from restricting the things you can do to reducing your ability to deal with day-to-day essential costs.
With this in mind, being able to clear debts as quickly as possible is a priority for most people. The freedom that you get to experience once you’re debt-free can boost your quality of life enormously; so the faster you can get your debts paid, the better your future will be.
Some of the ways in which you can try and speed up your debt repayments include:
Make bigger repayments
With debts such as credit cards, catalogues and store cards, you will have a minimum amount that you have to repay each month. However, paying the minimum means that you will be stuck in debt for ages and you will probably pay a huge chunk of interest into the bargain. Make cutbacks in other areas so that you can increase the amount that you repay on these debts each month. This can make a huge difference to the amount of time it will take you to clear the balance as well as to the amount of interest you will end up paying.
Snowball your debts
If you have a number of different debts, you will probably find that they are all due to clear at different times. Rather than just spending the money you save as each debt clears, put it towards the next one. Keep doing this with the money from each debt as it clears, and you will soon find that you are clearing each of your debts in record time. This is called the snowball effect and can be invaluable in terms of getting rid of those cumbersome debts with far greater speed and with far less interest to pay.
Transfer your debt
You can often speed up the amount of time it takes to clear your credit card debts by transferring the debts onto a different card. For instance, if you have making payments on a high interest credit card, a huge amount of each repayment could be going towards paying interest. Rather than wasting your money, transfer the balance onto a balance transfer credit card. This will give you a generous period of time within which to clear the debt without having to pay any interest, so you get it cleared off more quickly.
It is also important for you to acknowledge problems when it comes to paying off your debts, as ignoring repayment difficulties can simply make matters worse. If you are struggling to cope with your debt, seek advice from experts such as those from Consolidated Credit, as this will help to ensure you get back on track more quickly.
I’ve agreed with so many of your posts but using debt consolidation is an idea with which I respectfully disagree.
First many of these companies are rip offs charging you for a service you can easily do yourself. Second, it doesn’t address the behavior that got you into debt to begin with. Many feel relief after a debtCON (a phrase I lifted from the Dave Ramsey forums) and then start charging again (I know you aren’t suggesting that at all). The end result is that they have more debt than what they started with.
The snowball worked beautifully for us. We’ve been debt free (except the mortgage) for years and that mortgage is almost toast too.
We did surf debt to less expensive cards along the way. I don’t know if 0% offers are still around but that’s something we often took advantage of. My husband and I would read the offers together to make sure the offer made sense (sometimes there were transfer fees and other got cha’s).
One other tip is to call your credit card companies from time to time and just ask for an interest reduction. Our credit kept improving as we got our act together and we were often given rate reductions without any hassle. We just had to ask.
I enjoy reading your blog!
I think to benefit from a balance transfer credit card, one must first do their homework to determine the appropriate cards for their specific needs and secondly have the financial discipline to use that card to purposefully solve the debt problem.
Snowballing on the other hand is an awesome strategy if executed consistently and with some discipline!
I’m a big advocate of balance transfer cards, if they can be used carefully. So long as you are dedicated to transferring over the balance and not putting anything else on the card and paying enough each month to pay it off by the time the 0% interest expires, I recommend doing that.
I’m not a huge fan of the snowball method for myself, only because I have a large student loan with a significantly higher interest than my smaller student loans. So I’m big on paying off that high interest loan first, even though it’s the highest amount (paying $115 in interest each month is NO FUN). But each person is different so it’s best to do what works!
Snowballing your debt is super helpful. Little amounts definitely add up over time!
The first tip is really the trick, IMO: making the largest monthly payment you can manage starts to tip the scales in your favor. Though I agree that transferring the debt can accelerate the process, and can be a good tactic (as long as it’s combined with the other steps).
I really like these tips. My husband and I have used the balance transfer trick to have our new bed on a 0% interest card. Of course, this was back before we realized we shouldn’t be spending large sums of money on things when we don’t have the cash to pay it off! I wish it was something we could take advantage of to pay off my student loans, but so far they’re just too large. Paying interest on those suckers is killing me!
I did consider debt consolidation for my student loans, but I like the freedom of being able to defer payment if necessary. I also only have one loan with a gigantic interest rate, so consolidating the others into it wouldn’t make much sense; I’ve only found places with loans of around 7%. It’s frustrating.
Really nice tips here on clearing debts. I have done a couple of these as well as having a debt management plan. However I’m a firm believer in acknowledging you have a debt problem which I think is the first step prior to these tips. Once you understand the extent of your debt you can chose the route(s) you wish to try/undertake.
I really enjoyed these tips! I have tried a few of them myself. If none of these ideas work, I highly suggest going to debt consolidation counseling. They’ll be able to help you get to the root of your debt problem and resolve it quicker than you can imagine.
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