At a Glance

The average American has $8,398 in credit card debt, $38,792 in student loan debt, and even more in mortgages. In fact, consumer debt reached nearly $15 trillion in 2020, growing primarily in home, auto, student loan, and credit card debts.

If you’re thousands of dollars in debt, it can seem impossible to pay it off. If you have different kinds of debt, it can be complicated and confusing to keep track of what you owe, when, and to what creditor. But getting out of debt has a number of benefits, both to your physical and mental health as well as your wallet. The good news is there are a number of ways to pay off debt.

In this article, you’ll find:

The Fastest ways to get out of debt

Getting out of debt fast is a goal for many who have debt. The sooner you get out of debt, the faster you’re able to save money on interest and live debt-free.

The 12 fastest ways to pay off debt include:

  • Making and sticking to a budget
  • Recognizing and avoiding bad habits
  • Using a loan payoff calculator
  • Creating a debt repayment plan
  • Getting a debt consolidation loan
  • Paying more than the minimum balance
  • Taking advantage of balance transfers
  • Starting a side hustle
  • Selling your stuff
  • Downloading a debt repayment plan app
  • Avoiding credit card spending
  • Deleting credit card auto-fill

1. Make and stick to a budget

According to experts, creating and sticking to a budget is one of the best ways to understand your spending habits and make changes to reach your financial goals faster. When you know where your money is coming from and where it’s going, you’re able to make adjustments so you can put more toward paying off debt. To create a budget,

  • Calculate your income.
  • Document your monthly expenses, including necessary and unnecessary expenses. Come to the best average you can for expenses that aren’t fixed each month.
  • Set realistic goals for how much you’ll put toward debt, where you’ll cut spending, or what you’ll do to increase your income.
  • Track everything. You can use a pen and paper, a budgeting app, a spreadsheet, or another way that works for you. Create categories for each purchase to better understand what you’re spending and where.
  • Make spending cuts where you can. Once you know where your money is going, figure out where you can eliminate spending and put those funds toward paying off debts.
There’s no way around it. Making a budget is the first step to paying off debt.

2. Recognize and avoid bad habits

Once you’ve created a budget, you know where you are spending money that you shouldn’t be and can attempt to cut back. Do you eat out more than you should? Are those drive-through stops adding up? Do you grocery shop without a plan, which leads to impulse food purchases? Do you pay for a gym membership or subscription service you don’t use?

Recognizing these bad spending habits can help you make a plan to avoid them, saving you money and giving you more income to contribute to paying off debt.

3. Use a loan payoff calculator

A loan payoff calculator can help you pay off loans faster, allowing you to save money on interest and get out of debt quicker. Enter your loan details, compare debt repayment plan options, factor in any additional income, and get an estimated debt-free date and savings on interest. You can use this tool to help decide which loan repayment method works best for your goals.

4. Create a debt repayment plan

When you create a debt payoff plan, you’re analyzing the total of all of your debts, selecting a debt payoff strategy that is best for your goals, and setting and achieving small, SMART goals on the way to being debt-free. Steps to creating a debt repayment plan include creating a budget, adjusting your spending, and taking steps to improve your credit score.

There are primarily two strategies to pay off debt: the debt snowball method and the avalanche method.

Snowball method to pay off debt

The snowball method focuses on paying off debts in order of smallest to largest. This helps you gain momentum, like a snowball, and pay off your debts faster.

Start by ordering your total debts from smallest to largest, regardless of interest rate. Focus on paying off the smallest debt first while continuing to make minimum payments on your other balances. Then, pay off the next smallest debt, and so on until you’re debt-free.

You can use a debt snowball calculator to estimate your savings, figure out which debt to repay first, and how much to put toward your lowest balance. You’ll also get an estimated timeline for when your debt will be repaid.

Avalanche method to pay off debt

With this method, you pay off the debt balances with the highest interest rates first (while still making minimum payments on your other debts). You’ll put all of your extra funds toward the debt with the highest interest until it’s paid off, and then move on to the next highest interest, and continue until they are all repaid.

This method is great for saving you money on interest in the long run. To estimate your savings and start creating a plan, use the debt avalanche calculator.

5. Get a debt consolidation loan

By consolidating debt, you’re combining multiple debts into one more manageable debt with a lower interest rate. This helps you pay off debts faster and easier while saving money on interest.

When looking for a loan, find one with the best debt consolidation rates and a favorable repayment timeline. There are different types of debt consolidation loans, such as personal loans, home equity loans, and 401(k) loans. Using a debt consolidation calculator can help you estimate your savings and a timeline to being debt-free.

6. Pay more than the minimum balance

Credit cards, student loans, auto loans, and other types of debt require you to make a minimum payment each month to avoid fees. To pay off debt, you should try to pay more than the minimum balance. Contributing more than the minimum each month can lower how much you’ll pay in interest, as well as help you pay off the loans faster.

7. Take advantage of balance transfers

A balance transfer is when you take a credit card balance from an existing, high-interest card and transfer it to a low or 0% interest card. Be sure to pay attention to the terms of the 0% APR card, because it’s often an introductory offer that will expire. You’ll need to pay off the debt before the introductory offer ends or you may face a significantly higher interest rate.

8. Start a side hustle

Increasing your income is an easy way to pay off debt because you can put all of your extra earnings toward your debt payments. It’s estimated that one in three Americans have or plan to start a side hustle, and those additional funds can go a long way when it comes to repaying debt.

9. Sell your stuff

If you don’t want to start a side hustle or get a second job, earn some extra income by selling things you no longer use or need. This could be clothing, shoes, accessories, books, electronics, kitchen supplies, or other items. Whatever you earn should be put directly toward paying off your debt.

10. Download a debt repayment plan app

There are mobile debt repayment plan apps available that are designed to help you pay off debt faster and easier. Not only can they help you understand what debt you owe, but they can also help you analyze and track your finances, easily create and apply payoff plans to your own situation, and learn more through planning tools and resources. You can also easily keep track of your progress, which may help keep you motivated.

11. Avoid credit card spending

When you aren’t accumulating more debt, you can pay off what you already owe easier. Even if you earn cashback or points on your card, avoiding spending more until you’ve paid off your current debt can help you move toward being debt-free.

Cut up those credit cards (for now).

12. Delete credit card auto-fill

If you’ve stored your credit card information on a retailer site, it makes the checkout process easier but makes spending easier too. You’re also more likely to buy things you don’t need because you don’t have to really think about the purchase. By deleting your credit card information from sites where it auto-fills, you can avoid spending on your card and racking up more debt.

Tips to pay off debt

When it comes to paying off debt, there are many options, tools, and resources to choose from and learn from. Follow these tips to paying off debt to pay it off easier:

  • Research your options and understand what’s available to you. There are so many ways you can pay off debt, including debt consolidation loans, balance transfers, debt management plans, refinancing, debt settlement, and more. If you don’t know all of your options or feel confident about which one is best for your circumstances and goals, you may have more difficulty paying off your debt.

You’re in the right place — keep doing your research!

  • Reprioritize your spending. Even if you’ve made a budget and are tracking how much you’re making and spending, categorizing your spending (such as transportation, groceries, entertainment, etc.) can be helpful in understanding where you can cut back. Then, you can take that money and put it towards your debt. Even if you have to make some sacrifices in the short term, it will be worth it in the long term.
  • Ask for help. There are financial counselors and specialists out there with resources, information, and expertise to help you learn how to get out of debt. They can provide assistance and help you choose a strategy that’s best for you. While sometimes these resources cost money, your savings may outweigh the cost in the long run.
  • Start an emergency savings account. Experts suggest you have 3-6 months of expenses saved in an emergency fund that you only tap into if there’s an emergency. Having these savings can keep you from getting further in debt due to unexpected costs.
  • Negotiate your bills. Contact your utility company to learn if there are things you can do to lower your bills. Cancel unnecessary services such as a Netflix subscription or gym membership, or ask your cell phone provider if there’s a way you can pay less with a different plan. Lowering monthly bills is an easy way to find more cash to put toward paying off debt.


The most important thing to remember if you have no money or savings is to avoid taking on more debt. Borrowing money to pay off other debts, or taking on debt for unnecessary spending, can prevent you from reaching your debt-free goals. Don’t take on any more debt until you’ve paid off what you already have. It’s also important to create and stick to a budget so you know where you can cut spending and put more toward paying off your debt.

While poor credit may disqualify you from some debt repayment programs, such as debt consolidation loans or 0% interest balance transfer credit cards, there are other options available to you. Talking to your bank about options is a great first step. You may also want to consider debt management programs or debt settlement possibilities. Be sure to research the pros and cons before making a decision.

You can use your pension to pay off debt if you’re age 55 or older, have a personal or company pension you’re not currently paying into or receiving, and if you can, at any time in the future, be employed and be able to continue to work. However, you may be taxed on some of the withdrawn funds and you’ll be leaving yourself with a lower monthly income in the future.

Learn more: Can you use a pension to pay off debt?