Living with debt can be very stressful, and for many people, that feeling won’t go away until what they owe has been paid back in full. Whatever your reason for finding yourself in debt, knowing how to pay it off quickly and efficiently can help alleviate that stressful feeling. Additionally, knowing how to pay off debt fast will help you achieve your goals quicker and give you more confidence in your ability to pay back the money you’ve borrowed should you ever need to take out a loan in the future.
Tips for Paying off Debt
- Pay more than the minimum: Not every tip to knowing how to pay off debt fast involves special insider knowledge that only a lending expert would have. Some are common sense, like this one. Consistently paying more than the minimum amount will get your debt paid off quicker and help you save on interest.
- Pay more than once a month: Some lenders have special terms that allow you to make extra payments on top of the usual monthly bill. Doing so will not only accelerate the debt payoff process but can also lower your balance/utilization ratio. This ratio is one of the factors credit reporting agencies use when calculating your credit score, so paying more than once a month can even give your credit score a boost!
- Shorten the length of your loan: Shortening the length of your loan through refinancing can help you pay it off faster, and if you keep the same interest rate, it means you won’t be paying the same interest over the course of the loan. However, keep in mind that shortening the length of a loan could increase monthly payments.
- Consolidate multiple debts: If you want to know how to pay off debt fast, consider combining certain credit card balances or high-interest rate loans into a new loan with a lower interest rate.
- Pay off the most expensive loan first: Were you ever told to start with the larger items when helping bag groceries for your parents? This tip for how to pay off debt fast follows similar reasoning. By paying off the most expensive loan first, you reduce the overall amount of interest you pay and make a big impact on your overall debt. Then focus on the next biggest debt, then the next one, and so on.
- Consider the snowball method: When it comes to debt payoff, you should familiarize yourself with the snowball method. It’s the opposite of paying off the most expensive debts and working your way down because you’re instead starting with the smallest of your debts and working your way up to larger balances.
- Keep track of all your bills and pay them on time: Another one of the more obvious tips to knowing how to pay off debt fast, is staying on top of all you owe. Knowing what debt you owe will help you strategize what to pay off quicker and ensure you don’t miss any payment dates. We recommend using payment reminders with e-billing and/or autopay if it’s offered by the lender.
If you’re in need of a debt consolidation loan to help you accelerate the debt payoff process, Unsecured Funding Source can help! We can help you understand what you need to qualify for an unsecured loan to pay off your debts, so you’re free to take out another loan for your next business venture. Contact us today to get the conversation started!