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Getting into debt is easy. Paying with credit doesn't seem to hurt as much as paying with cash. Unfortunately, digging out of debt is hard. Thankfully, paying off debt doesn't have to be any harder than you make it. If you want to pay your debt off faster than you currently are, you must start making extra payments.
How to Pay Debts Faster
But where do those extra payments come from? There are only two options. You can earn more money and use the extra income to make extra debt payments or you can spend less of the money you already earn and use that money to make extra debt payments. That said, how do you apply the extra money toward your debt and are there any ways to reduce the length of time it takes to pay off your debt other than making extra payments? Here's what you need to know.
There are two main schools of thought on paying off debt faster than scheduled. The first is called the debt snowball and has been popularized by financial guru Dave Ramsey. The second is called the debt avalanche. These two methods both accomplish the same task of paying off your debt by making extra payments. The difference between the two is how extra payments are applied.
Another way to pay your debt off faster is to lower the interest rate on the debt you currently have. While there are many ways to accomplish this task, two of the most popular ways are using introductory 0 percent interest rate balance transfer credit cards and taking out a personal loan with a lower interest rate than your current credit cards
. Combining the lower interest rate and extra payment methods can result in a much faster debt pay off than if you simply stick with making the minimum payments like most people do.