Best Way to Pay Off Debt Fast (That Actually Works)

Best Way to Pay Off Debt Fast (That Actually Works)

Getting out from under the crushing burden of debt may seem impossible, but there are tried and true strategies that can help you finally achieve financial freedom. By understanding the different types of debt, being strategic with repayment methods, cutting expenses, and boosting income, you can pay off debt faster than you ever imagined.

This guide covers step-by-step techniques for quickly getting out of debt for good. Implement these methods to take control of your finances and live life on your terms.

Understanding the Debt You Owe

Awareness is half the battle when it comes to paying off debt fast. The first step is to break down your total debt obligation by grouping obligations into categories. Common debt types include:

Credit Card Debt

They are revolving debt, which usually has high variable interest rates. Credit cards tend to have quick payment turnover but lots of temptation to overspend.

Auto Loans

Installment loans with fixed monthly payments made over a defined repayment term to purchase a car. Auto loans typically have lower interest rates than credit cards.


They secured installment loans with fixed payments spaced over 15-30 years to purchase a home. Mortgages have relatively low-interest rates but large overall balances.

Student Loans

Installment or revolving loans from private lenders or the federal government to pay for higher education. Interest rates and terms depend on the loan source.

Once you’ve categorized obligations, tally up the totals for each debt type and input information into a spreadsheet or app to track payoff progress. Resources like Mint, Tiller, and EveryDollar can help you log your debts with tracking tools. Make a note of interest rates, minimum payments, and term lengths, as these impact how repayment is prioritized.

Refer back to your tracker throughout the debt repayment process to stay motivated and focused. For example, watching your total debt shrink by thousands of dollars provides positive reinforcement to keep going.

Strategies for Paying Off Debt Quickly

When it comes to accelerating debt repayment, there are a few leading methods for rapidly eliminating what you owe:

The Debt Snowball Method

This beginner-friendly tactic focuses on paying off debts from smallest balance to largest, regardless of interest rate. Here’s how it works:

  1. List debts from smallest balance to largest
  2. Make minimum payments on all debts except the smallest
  3. Put as much money as possible towards the slightest obligation
  4. Repeat the process as each balance is paid off


  • Builds early “wins” to stay motivated
  • Allows flexibility with repayment order
  • Easy-to-understand process


  • It does not factor in interest rates
  • It can cost more over time than other methods

The debt snowball method works best for those needing a motivation boost at the start of repayment. An early, quick win after paying off a small debt can build powerful momentum.

For example, if you owed $2,000 on a retail store credit card, $5,000 on an auto loan, and $8,000 in student loans, you would tackle the store card first before moving to the auto loan, then the student loans.

The Debt Avalanche Method

This strategy focuses on repaying debts with the highest interest rates first to reduce the total cost of borrowing. Here are the steps:

  1. List debts from highest to lowest interest rates
  2. Make minimum payments on all debts except the one with the highest rates
  3. Put as much money as possible towards the highest-interest debt
  4. Repeat the process as each balance is paid


  • Mathematically optimal to save the most money
  • The best strategy for reducing the total interest paid


  • It can take longer to feel “quick wins” with motivation
  • Requires understanding of interest calculations

Avalanche works best for those with expensive credit cards, payday loans, or high-rate debt where interest piles up. Even an extra 1% interest on thousands of dollars of debt equates to hundreds wasted each year.

For example, you may have no annual fee credit card charging 29.99% interest with a $1,000 balance and a federal student loan charging 7.9% interest with a $15,000 balance. You would attack that credit card before tackling the student loan to avoid nearly $300 per year in interest.

Leveraging Debt Consolidation

Debt consolidation streamlines multiple debts into one new consolidated loan or credit facility. This can be balance transfer credit cards, debt consolidation loans, home equity loans, and more.

Balance transfer cards allow you to shift credit card balances to a new card offering 0% introductory interest for 12-18 months. This pause on interest accumulation lets you maximize the paydown of the existing principal. Cards like Chase Slate make balance transfers easy.

Debt consolidation loans roll multiple debts into a fixed personal installment loan with regular monthly payments over 2-5 years. These can offer lower interest rates of 5-10% compared with credit cards. LendingClub is a popular peer-to-peer debt consolidation loan platform.

In either scenario – balance transfer card or consolidation loan – you must continue making on-time payments and avoid racking up new debt on existing open accounts. Consolidation also tends to lower your credit score in the short term but will rebound as debts decrease.

Judge each strategy carefully based on your situation and commit to making reliable payments in the future. Consolidation can provide much-needed reductions in interest rates but only works if you stick to fundamental habits of spending less than you earn.

Creating a Realistic Budget

Making a budget and sticking to it allows you to direct more cash flow toward debt repayment:

  • Over the past three months, track income from all sources, such as your job, side hustles, investments, etc. Tally up averages.
  • Over three months, track baseline expenses like rent, transportation, food, utilities, and debt payments. Calculate averages.
  • Identify flexible discretionary expenses, like entertainment, hobbies, and memberships.
  • Build a reasonable budget with income higher than baseline spending.
  • Trim discretionary expenses.
  • Allocate extra savings to debts.

Apps, like You Need a Budget, Mint, and Personal Capital can quickly import transactions and project future cash flow. This takes the hassle out of manual calculations.

Cutting small variable expenses like the daily cafe latte or unused gym membership can unlock hundreds of monthly savings. Avoid drastic cuts to baseline needs, which may prove unsustainable in the long term.

For example, reducing entertainment spending by 20% could put an extra $100 monthly towards debt repayment. Minor cuts add up substantially over time.

Bringing in More Income

Increasing earnings allows you to maintain living expenses while having more cash to pay down balances quickly.

Side hustles like ride-sharing, tutoring, freelance writing, website design, etc, allow you to set your hours and compensation rates. This supplemental income goes straight towards debts.

Part-time jobs also bring in money without intensive time commitments. Weekend retail shifts, restaurant server jobs, dog walking, and more let you clock extra hours as your schedule permits.

Consider selling unused items around the house through local online marketplaces like Craigslist and Facebook. Old electronics, instruments, designer items, antiques, and collectibles may quickly unlock hundreds or thousands of dollars if no longer needed.

Finally, explore promotion opportunities to increase your compensation and benefits at a current job you enjoy. Look also at openings with higher salaries and development potential within your field.

Case Study: Ruth’s Story

Ruth had racked up $12,000 in credit card debt, $15,000 in student loans, and a $5,000 personal loan from her aunt. Between minimum payments and high 20%+ interest rates, she could hardly keep up with interest charges at over $500 monthly. There seemed to be no end in sight.

After developing a clear snapshot of her obligations and related costs, Ruth decided to pursue an aggressive combination strategy:

  • Credit card consolidation: She transferred card balances to a 0% promotional card.
  • Student loan refinancing: Her federal loans were refinanced with a private lender at 6% fixed rates.
  • Debt avalanche: She first tackled the highest-interest debt regardless of balance size.
  • Budgeting and cost cutting: Ruth trimmed expenses by $400 monthly by decreasing restaurants, entertainment, and impulse shopping.
  • Income increase: She took on ten freelance consulting hours weekly at $50/hour, generating $2,000 monthly.

The compound impact was astonishing – with focused dedication, Ruth eliminated all debts in just 22 months while increasing savings. She vowed never to carry consumer debt again.

Key Takeaways

  • Consolidate debts at lower interest rates
  • Refinance eligible student loans
  • Use the avalanche payoff method
  • Create and follow a spending budget
  • Trim flexible expenses
  • Increase income with side jobs


Escaping the burden of debt may seem out of reach, but through tailored strategies and diligent follow-through, you can pay off any debt faster than expected. Consolidate high-interest balances, refinance loans when possible, build extra income streams, and budget wisely to accelerate payoff.

While the process requires discipline and some sacrifice, staying focused on the end goal of financial freedom makes the effort worthwhile. Paying off debt completely transforms your life and unlocks savings capacity for everything you want to accomplish. Know that with consistent effort, paying off debt fast is achievable.