Strategies to help pay off debt faster


Tackle your debts with speed and efficiency, so that you can put more money toward your financial goals.
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If one of your goals is to pay off debt quickly, you may wonder where to begin. Fortunately, there are several practical strategies you can employ to help repay your loans faster, while also saving for other financial goals.

As you create a plan to tackle your debt, we are here to be a resource. Here are strategies for accelerating your debt reduction efforts:

In this article:

Build a budget and cash reserve

While you may be eager to start tackling your debt and allocating any extra money to your loan payments, it’s important to have a good financial foundation in place before fast-tracking your efforts. You can better position yourself by doing the following:

  • Implementing a budget to monitor your spending, rein in expenses and identify opportunities to reallocate money to your debts.
  • Maintaining a cash reserve, which can help you handle any unexpected expenses that may arise and ultimately may prevent you from going further into debt should there be an emergency.

Combined, these two actions will keep you focused on your debt elimination efforts and can help protect against any potential roadblocks that may deviate you from course.

Make extra payments

To pay off your debt quickly, you’ll need to pay above the amount due each month. This extra amount will go directly toward the principal and reduce the total amount owed.

Here are a few techniques to achieve this:

  • Avalanche method: With this approach, you make the minimum payments on all your debts each month, then direct any remaining money toward whatever debt has the highest interest rate. Once that debt is paid off, you apply the extra cash toward the debt with the next-highest interest rate, and so on — until all your debts are gone. By tackling your highest interest debt first, the avalanche method reduces the total interest you will pay on your debts — and the amount of time it will take you to get out of debt. However, it requires discipline and a consistent level of discretionary income.
  • Snowball method: With this approach, you make minimum payments on all your debts, then direct any extra money each month toward your debt with the smallest balance. When that debt is paid off, the money previously allocated toward the old debt is “snowballed” into paying off the next-smallest debt, and so on — until all your debts are gone. This method provides motivation by achieving quick debt-reduction “wins.” However, it may take longer than the avalanche method — and may not reduce as much of the interest you’ll pay.
  • Pay biweekly instead of monthly: By making biweekly payments, you’ll pay half your monthly bill every two weeks instead of making one full monthly payment. This means you’ll make an extra payment each year, reducing your repayment timeline and the amount of interest you’ll pay.

Swap high-interest debt for lower-cost loans

Debt consolidation — or combining multiple debts into a single, larger debt, usually at a lower interest rate or longer term — can be another avenue to manage debt.

Some options for consolidating loans include:

  • Use personal loans to pay off all your other existing debts. This allows you to swap high-interest debts for a single loan with a lower, fixed interest rate and a fixed monthly payment.
  • Tap into securities-based lending to borrow against a portion of your non-retirement investment portfolio as collateral. This can provide cash to help cover expenses or pay off debt while keeping your investment portfolio and strategy intact.
  • Take out a home equity line of credit (HELOC), to use the equity in your house for other purposes. Once you establish your line of credit, you can access the funds to pay down high-interest debt. However, while this strategy can reduce interest, your home is used as collateral, meaning that if you don’t repay the debt, the lender has claim to your home.

Learn more: How to handle student loan debt: 7 strategies

Renegotiate with lenders

Creditors can be more flexible than people assume. Some are willing to negotiate with customers looking to lower their interest rates, create a payment plan or make accommodations to help better manage their debt. Sometimes, you just need to ask.

Look for extra income

Earning more money is another way to help pay off debt faster. You can do that by picking up more work, taking on an income-generating “side hustle” or finding a new job that pays more.

Dedicating any extra cash toward your debt can also help. If you receive extra money in the form of a tax refund, annual bonus or monetary gift from a loved one, consider allocating all or part of it toward your debt.

Sell off assets

If you’re contending with high-interest debt, it may make sense in certain scenarios to liquidate some assets to pay off your obligations faster. For example, if you own a car with a high resale value, it may make sense to sell the vehicle, purchase a less expensive car and use the remaining proceeds to pay off the high-interest debt.

Get personalized advice for paying down debt

If paying off debt quickly is a priority of yours, we can provide guidance on effective strategies that also fit your values, lifestyle and financial goals.

Questions to discuss with us

  • How can I pay off debt quickly?
  • How can I balance paying down debt with saving for my financial goals?
  • Should I consider liquidating certain assets to tackle my debt?
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