24 Dec 5 Easy Ways to Pay Off Debt Faster in 2021
Getting out of debt (especially after the festive season) can cause financial heartache and stress.
You’re probably one of the many Australians who experienced the damage of the holiday season and started stressing out how to get out of those debts. Things will specially get real when those bills and statements started coming in.
Paying off debt could be an overwhelming experience. It takes a lot of work, dedication, and discipline especially if you wish to clear your credit faster. Sitting down and realising how much money you actually owe can bring out a lot of emotional factors.
But this shouldn’t be the case!
Getting out of debt might be seen as a daunting task, but you just need to have the determination and an informed guide to help you eliminate your debts. If you have already have the will to becoming financially free, then good for you mate! You know that every step and effort you took for eliminating debt at the end will all be worth it! For some people, the mere idea of calculating numbers or even knowing where to start is already complicated. That’s why it’s always a good idea to consult a professional and see what your viable options are in terms of reaching your goal—that is to pay off your debt faster!
As an experience Finance Broker myself, I always share to my clients what worked for me and see if the following ways would work for you, too. Here are the 5 easy ways to help you get out of your debt faster this 2018:
Assess your current debt situation.
The initial step would be to check how much ‘damage’ is there. Make a list of all your debts and put the following: what you owe, interest rate, monthly payment, and payment dates. There are a lot of methods suggested by experts such as the snowball method where you settle the smallest debt first. This could give you enough encouragement that you can actually pay off your debt fast.
Pay more than the minimum payment.
Got enough dollar to spare? Save this until you can come up with an amount that you could contribute to your monthly payment. Whether you have credit card debt, personal loans, or home loans, one of the effective ways to pay them down sooner is to make more than the minimum monthly payment. Doing so will not only potentially help you save on interest throughout the life of your loan, but it will also speed up the payoff process.
Cut your spending.
While you’re assessing your debt situation, you might as well list down your expenses and see where you can compromise. Keep track where your money is going. You may realise you are spending way too much for that coffee which you can always have at home! It won’t hurt to sacrifice a little bit on your lifestyle especially if you really want to pay off your debt faster.
Create a budget.
Once you decided how to cut your spending, create a budget and stick to it. The thing is, setting up a budget is easy. The real challenge comes when you have to actually implement it. You may also want to consider looking for ways to earn extra cash such as a tutoring gig or selling some of your stuff you don’t use anymore. This could help you with your set budget.
Use a ‘tool’ to get out of debt.
Some would suggest you avail a balance transfer. While this may work and can help you potentially save up on interest, this may prompt you to use your old credit card, thereby making you build a new credit again. I suggest you consolidate all your debts and get a personal loan. If you have excellent credit, you might even get a lower interest rate with a personal loan. If you think debt consolidation could help, find out today whether it will work on your current situation or you may want to compare some of the most competitive personal loan options by asking your local finance broker today!
Credit Representative Number 486927 is authorised under Australian Credit Licence 389328.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.