How to Get Out of Debt Faster
Paying off debt is one of the most important steps toward financial freedom. With a strategic plan and extra payments, you can save thousands in interest and years of financial stress.
Debt Payoff Methods
Snowball Method
Pay off smallest debt first → Apply that payment to the next → Repeat
Advantage: Psychological motivation from seeing debts disappear quickly.
Avalanche Method
Pay off highest-interest debt first → Move to the next → Repeat
Advantage: Mathematically the most efficient, saves the most in interest.
The Impact of Extra Payments
Even $50-100 extra per month can make an enormous difference:
- Less interest: You reduce principal faster
- Less time: You can save years of payments
- Less stress: Each extra payment brings you closer to freedom
Set up automatic extra payments so you don't have to think about it. Even small automatic increases add up significantly over time.
First build a basic emergency fund (1-3 months of expenses). Then focus on debts with rates above 7-10%. The interest you pay almost always exceeds what you'd earn saving.
Yes. Many banks allow rate negotiation, especially if you have good credit history or threaten to transfer your balance. You can also consolidate debts at a lower rate.
If the consolidation loan rate is significantly lower than your current debts and you commit to not generating new debt, it can be a good strategy.