Debt is something that can haunt you for a lifetime if it is not managed wisely. However, if you are wise with your finances, you will get your debt paid off significantly quicker. However, it can require due diligence and wise management of money on your part. Here are some methods for you to repay your debt quickly.
Pay More Than the Minimum Payment
This sounds like an easy, logical enough thing to do, but unfortunately, many people insist on making only the minimum payment as a means to save money and delay paying more. While there is nothing technically wrong with making the minimum payment, you may end up spending much more time paying off your debt, and you can even extend its shelf life in the process. The only sure-fire way to expedite this process is to pay more than the monthly minimum. You can slash years off your debt’s shelf life if you increase how much you contribute to paying the debt monthly.
You may also be able to save yourself the headache of interest payments. In doing so, however, you should ensure that there are no prepayment penalties that your loan charges you before you get started. The last thing you need is to be needlessly penalized. Mobile debt repayment tools are something you may want to consider if you want to more accurately track your progress. You can visit Hornet Partners as a valuable resource for sound advice in this regard.
“The Debt Snowball Method”
If you can afford to pay more than the minimum monthly payment, you should consider the very popular debt snowball method to speed the process up. First, you want to list all of the debts that you owe from smallest to largest. All of the excess funds should be thrown at your smallest debt, while the minimum payments should be made on the larger loans. Once all of the smaller balances are paid off, you should put all of that extra money towards the next smallest debt on the list and so on. If you are not sure how to go about this specifically, Hornet Partners have tremendous resources that can help you allocate debt priorities and where you should be putting your money.
As time progresses, you may see these balances gradually disappear one after the other. This can give you much more leeway to throw more money at larger debts such as mortgages, student loans or car payments. There is a multi-faceted benefit to you in utilizing this method. First, you get a psychological boost from knowing that you paid debts off in the first place. While some debts are smaller than others, any debt that is paid in full should be considered a victory, because you do not need to focus any more money on that particular debt. The reason why it is called the “snowball method” is because the idea is to snowball all of the extra money you have towards your debt until you can finally say you are debt-free.
With enough consistency, you may be able to say that sooner rather than later.
Get A Side Hustle
When it comes to paying off debt quickly, having multiple streams of income is the name of the game. You can further expedite the debt-paying process by picking up a side hustle or some part-time employment. Of course, you may have to consider your schedule, availability and what you can manage. However, there are plenty of online freelancing opportunities and job board postings that may cater to your personal schedule. Ideally, you will want to pick up work where you are not “on the clock” and you can work whenever you are available. Once you are able to do that, you can use that extra source of income to throw at the debt and free up additional room for saving or making larger payments.
Sell Items You Do Not Need
Any source of income helps when it comes to paying off debt. This can come in the form of selling household items that are still functional but are of no use to you. These could be old electronics such as the TV, clothing, furniture or other items people in your community may be interested in. Consider holding a yard sale or putting your items up for auction online. You would be surprised at how many people would be interested in a certain item. You will not know if you do not try.
