Easy Ways to Pay Off Debt Fast

Living with more debt than you can afford eventually takes its toll. It stops you from enjoying life to its fullest, and it can prevent you from buying property.

If you can get your debt under control, you can begin to rebuild your credit rating. But, of course, this is much easier said than done.

There are many types of debt, and some carry more weight in a legal sense than others. To take control of your debt levels, you need to prioritise.

The first thing to do is to protect your home. Whether you have mortgage or rent arrears, you need to know that you’re going to have a roof over your head for the foreseeable future.

Another big financial planning property should be government debt. Council Tax and any HMRC debts you have should be paid off as quickly as possible. The consequences of failing to pay these particular debts include heavy fines, seizure of property, earnings deductions and, in the most severe cases, imprisonment.

If you need to pay off debts fast, you have several options. Which of them you go with depends on your particular circumstances. We’ve compiled a list of the simplest and most effective debt repayment options.

Increase your income

pay off debts fast

Yes, this sounds obvious, but it’s often the simplest and most effective way to reduce your debt burden quickly. Some people choose to work a second, part-time job. Others pursue their money-making schemes, such as work in the so-called “gig economy”. Whether you get another job or take in a lodger, securing a second income — even for a limited time — can get you out of a debt hole.

Join a local credit union

One way to make your debt more manageable — and easier to pay off — is to consolidate it with one low-interest loan. If you’re experiencing debt difficulties, the chances of obtaining a cheap loan from a traditional lender are limited. But credit unions typically charge modest interest rates. Not only that, but these not-for-profit organisations also forego set-up fees and admin costs.

Speak directly to your lenders

Whether you’re dealing with a mortgage or a personal loan, avoiding the problem won’t make it go away. But if you’re proactive, you might receive a sympathetic response from your lender.

Call or write to your lender, and outline why you’re having difficulties repaying your debts. If you have a possible way to repay arrears, don’t be afraid to raise them and avoid repossession at all costs. The lender may well compromise — giving you extra time to pay, freezing interest or allowing a short payment holiday.

Remember: Calling in loans is an expensive business for lenders — and it’s something they’ll avoid if they can. Try to negotiate a sensible repayment plan you know you can stick to.

Move your debt around

Pay off debts fast

For a lot of people, the rate of interest on debt is what causes financial hardship. If you can get another lender to take on your debt, you might be able to drastically reduce the interest you’re paying.

A debt consolidation loan with a relatively low-interest rate can drastically reduce your debt repayments overnight. This also makes the day-to-day management of your debt a lot easier.

If your credit rating is still good, you might be eligible for a 0% rate credit card. Yes, this rate will only be in place for a limited time (six months to a year), but it might give you some breathing space. And you can always move your debt again when the interest-free period ends.

Don’t let debt rule your life. Take control… be proactive. The sooner you take charge of your debt, the sooner you can plan for the future.

DMCA.com Protection Status