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How to Pay Off Debt Faster (Ultimate Guide)

Among all of the things life can throw at you – rent increase, job loss, electricity bills- being caught in debts is one of the most uncomfortable situations one can be in!

With an average of 77% of American households being in any kind of debt you are not alone. Being in debt seems to be a widespread issue for many US households.

The longer you carry debt, the more interest you’ll pay over time. 

This makes it essential to pay off debt faster. And here is how!

Table of Contents

How to Pay Off Debt Faster

What is Debt and What Makes it Dangerous?

Before having a look at the steps to pay off debt faster, let us clarify the definition of debts.

Debts is pretty much like borrowing money from a friend or a bank with promise to pay it back later. So far so good. 

But there are also the so-called interest rates, meaning extra money you have to pay back. That is where it becomes uncomfortable.

So paying off debt always means to pay back the money you have borrowed plus interest rates. 

Debts are a common way to buy things you can’t afford right away, like a car or a house, or to cover expenses when you’re short on cash.

While debt can help you get what you need or want sooner, it can also be risky.

If you borrow too much or can’t make the payments on time, it can lead to stress, financial problems, and even damage your credit score.

That’s why it’s extremely important to be careful with debt and only borrow what you can afford to pay back later on.

How to Pay Off Debt Faster

Fortunately, there are several steps you can take to pay off debt faster. While assessing your debt situation and stop making more debts are the absolute fundamentals, using debt repayment strategies and increasing your income can really accelerate your debt repayment. 

For more in depth-knowledge just read on and be ready to change your financial future!

Assessing Your Debt Situation

This step is crucial! Before fighting your debts it is essential to face the truth. 

Debts come in various forms including credit cards, student loans or personal loans. 

So grab pen and paper or an Excel Table if you are not feeling old-school, and determine how much debt you have to pay off. 

In your calculation you should include factors such as all outstanding balances, interest rates and minimum payments.

This initial step might be the most uncomfortable one, but it is truly the most crucial. 

You can hardly fight the unknown, right?

Stop Making More Debts

Now that you have an exact debt amount in front of your eyes, it is now time to make this number zero.

Fighting debts but still paying with credit cards. This doesn’t make any sense!

If you start paying off on the one end, you cannot create new debts on the other end. This way, you can barely free yourself from your situation. 

So try to only spend money, that you have in your pockets. No loans ands credit card payments – at least if you are not 100% sure that you can pay it back.


Budgeting is a powerful tool to gain control of your expenses. There are several budgeting pans including the 70-20-10 rule.

This for instance translates to spending 70% of your income on wants and needs, setting aside 20% for savings and investments, and using 10% of the remaining income to repay debts. 

While such a budgeting plan can reduce the risk of being caught in overwhelming debts in the first place, they can be still useful for people who are already in these situations. 

In other words: Make your own plan! Look where you can cut expenses. For example, make your own 50-20-30 plan with 30% of your income being uses to repay debts. 

Make Minimum Payments

As you are now in your repayment mode, it is essential to start by making your minimum payments consistently.

Making your minimum payments is the most fundamental point when trying to pay off debt.

Being not able to repay the minimum amount of your debts will lower your credit score. And that’s really not what you want to happen!

Making your minimum payments regularly is thus the absolute basis of your repaying plan.

Exploring Debt Repayment Strategies

Once you managed to make all of your minimum payments you will successfully start your repaying process, but slowly

To accelerate this process there are repayment strategies worth paying attention to.

It is even worth applying these strategies for every single dollar you have left after having made all of your expenses and your minimum payments.

So let’s have a look at the two most proven methods:

Snowball Method

The snowball method involves paying off debts in order of smallest to largest balance. 

This method is great for people who struggle to stay motivated.


Well, starting by paying off the smallest balance will help build momentum. You will feel a sense of accomplishment pretty soon. 

Avalanche Method:

In contrast, the avalanche method focuses on minimizing interest payments and saving money in the long run.


You simply start by repaying the debt with the highest interest rate and continue making your minimum payments on other debts.

Using this method will save more of your money than the first method. 

Seeing progress may take longer here, as you start with your largest debts and interest rates. 

Increase Income

You can also optimize something on the other end! Just make more money. Easier said than done, I know…

But nowadays there are so many opportunities to make an extra income.

Due to digitalization you cannot only earn money offline but also online. 

And this makes things a lot easier.

Here are a handful of side hustles you can take on in 2024:

  • Freelance Writing or Editing 
  • YouTube Channel or Podcast
  • Affiliate Marketing
  • Fitness Training (virtually or in person)
  • E-commerce Store

Apart from these, you can also start by making money passively. There are a lot of ways to do so.

For whatever way you ultimately decide on, make sure you direct any additional income towards debt payments to pay off your debt faster.

Set Yourself a Payoff Date and Be Motivated

Do you know what’s better than paying off debt? Setting yourself a deadline!


It makes you even more disciplined and motivated. Tell yourself that you HAVE TO be debt-free to a specific date.

Even if you not manage it to this date, it has brought you a lot nearer to being debt-free!

Keep your goals front and center by visualizing your debt-free future and reminding yourself of the benefits of financial freedom.

Less stress, more flexibility …, isn’t that great?

Celebrate even small victories along the way – such as an extra payment or paying off a credit card balance!

Perhaps you can also seek support from friends and family.

Whatever helps you staying motivated: DO IT!

The Takeaway

At the end of each of my posts I provide a short takeaway. Just to make sure you remember the most important things you learned today!

Paying off debt faster is crucial for saving money on interest. The longer you carry debt, the more you’ll pay at the end of the day.

Plus, paying off debt reduces your financial stress.

Making a list of all of your debts and start budgeting your income is key when fighting your debts.

If possible, try to cut your expenses and use it to make regular payments.

Start by making the bare minimum payments.

Once you covered the absolute basics you can accelerate the whole proccess.

Use additional money to pay back your debts by using wither the snowball or the avalanche method. 

Ideally, start side hustles to make extra income and use it to pay off your debts faster.

Final Thoughts

Being caught in debts is a horrible situation that might seem inescapable. But that is not the case.

As you learned you can take several steps to pay off your debts faster. 

Just make sure to start as soon as possible, so that you can save money in the long run.