Money Management

The Ultimate Guide To Helping You Pay Off Your Debts Faster In 2023

Reports show that the average American has around $96,371 in debt. This includes credit card balances, mortgages, and student loans. Regardless of the type or amount of debt you have, it could result in a severe financial crisis and affect your credit score.

While there are terms and timelines to repay the debts, here are some tips to help you make your payments faster.

List Off Your Debts

Understanding your active debts helps you know how many payments you need to make, making it easier to plan and track. You should include the following information for every debt you list.

  • The type of debt, for example, student loan or credit card
  • Debt account or name
  • Balance
  • Minimum monthly payment
  • Interest rate
  • Payment length and terms
  • Payment due dates

You can write the debts from the ones with the highest balance or interest rate. You can choose to write this on google sheets or use pen and paper. While it can be overwhelming when you have a lot of debt, it ensures you remain organized.

Choose a Debt Repayment Strategy

Having a strategy makes it easy to remain organized and gives you a plan. The following are the most common strategies depending on the amount and types of debt you have.

Snowball strategy
This strategy involves paying off your small debts first, giving you momentum to pay off the bigger ones. If you use this strategy, list your debts from the ones with the smallest balance to the ones with the largest.

While paying off these small loans, ensure you keep up with the minimum payments on all other bills and loans. If you have leftover money, direct it to finish the small debts.

The debt avalanche
This strategy includes paying off debts, starting with the ones with the highest interest rate. Like the snowball strategy, ensure you make minimum payments on other debts.

This strategy helps you save a lot on interest and gives you more peace of mind knowing the enormous burden is out of the way.

Debt Consolidation

Managing debts from different accounts is challenging, and this strategy involves combining all your debts into one big one. The goal is to streamline your payments, which could help you settle the debt faster and reduce the interest rate.

The following are ways to consolidate your loan.

Balance transfer cards
Also known as credit card refinancing, this consolidation option allows you to transfer your credit card balance to a balance transfer card. These cards usually have a 0% introductory APR period, usually 12-21 months, meaning you can pay off the debt interest-free.

While most of them don’t have an annual fee, you might have to pay 3-5% of the amount you transfer as a transfer fee. Therefore, before you apply for the transfer card, ensure the interest you save will not go towards the fee.

Another downside is that you need a high credit score to qualify for most transfer cards. If the transfer card has a low limit, it might be impossible to transfer your debt.

Home equity loan
Home equity loans are secured, variable loans that let you take a loan against your home’s equity. They usually have lower interest rates than other loans. This consolidation method is suitable if you have large debts.

Personal loan
These are unsecured and fixed loans that you can get from a bank, credit union, or online lender. You can use the money to consolidate credit card debt or other small and big loans. The amount and interest of the loan depend on your credit score and history. Therefore, you should improve your credit score if you need a lot of money.

Debt management plan
This option involves negotiating with creditors to combine your debts into a debt with affordable interest. It is a good idea if you are in a lot of debt and don’t want to file for bankruptcy.

Pay More Than The Minimum Payment

While every creditor indicates a minimum monthly payment, you can make an extra payment that goes to the principal. This will help you settle your debt faster, saving you more money on interest in the long run.

However, ensure you read the loan terms because some lenders have penalties for early repayments.

Have a Budget

Having a budget guides you on how you use your money. It also helps you identify where you use cash unnecessarily, making it easier to reduce unhealthy spending and dedicate that money to debt repayment.

When creating a budget, always list your income after tax and fixed plus variable expenses. There are several ways to develop a budget based on your income and spending habits.

This budget strategy states that you set aside 50% of your income after tax for needs, 30% on wants, and 20% on savings or debt repayment. You can change the percentages depending on your financial standing.

Envelope method
This strategy involves having an envelope for every expense and filling it with the allocated amount. Once the money from one envelope runs out, you cannot add or use money from another envelope. It helps you track your spending and eliminate bad spending habits.

Zero-based budgeting
In this method, you must budget all your money to the last cent. Balance the expenses, including saving and debts, with the income until you get zero.

Avoid More Debts

Avoid taking out another loan or increasing debt when you are in repayment mode. This means you must stop using your credit card. You can use a prepaid credit card if you don’t like carrying cash around.

This is a credit card where you load money, and when it runs out, you must reload it. A prepaid card also helps keep your money safe because once you lose it, you only lose the money loaded.

You should also remove your credit card details from online stores. Online shopping can significantly hinder your debt repayment because it is readily available.


The key to settling your debt is remaining dedicated and disciplined. If you have a hard time, consult professional help. They will equip you with the financial literacy you need to not only settle your debts but avoid future debts and develop healthy spending habits.

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