[Mika]

Do you know what the number one method to become debt free is? Well, never borrow. Or, if you have borrowed, pay back. However, for many people borrowing money is a compulsion and paying back is difficult. If you have a debt, how do you pay it fast and become debt free?

Paying Your Debt Faster

Generally speaking, debt are of two types, short term debt and long term debt. Whether you have a short-term loan (like credit card bills) or a long-term loan (like a mortgage or car loan), you can pay your debt faster if you really try. So, how do you do it?

Paying Off Short-Term Debt Quickly

There are two ways to pay back your short term debt

1. Cut down on unnecessary spending and use that money to pay off your debt.
2. Work part time and do side hustle to earn extra money and use that money to pay off your debt

The basic idea is to generate extra income and save money so that you have surplus money to pay off your debt. Spend money only on things you really need, not on unnecessary stuff until you pay off your debt. You need to ask yourself “Do I really need to buy new shoes, clothes, dine in a fancy restaurant, go on a vacations, when I still have debt to pay?”

Paying Off Long-Term Debt Quickly

If you have a long-term loan, like a 25-year mortgage, you can pay it off in just 10 years with these strategies:

1. Instead of paying 12 easy monthly instalments (EMIs) in a year, pay 13 EMIs, one extra EMI every year.
2. Increase your loan EMI by 10 percent every year.

By doing these things, you can pay off your 25-year loan in just 10 years and end up paying 50 percent less interest compared to if you had paid it off over the full 25 years. The idea is to pay more than your minimum loan repayment. The more money you spend on debt repayment, faster you will come out of debt.

Debt Repayment Strategies That Works

Here are some debt repayment strategies that you can try:

1. Pay your high interest loan first, and concentrate on low interest loan only when you have paid your high interest loan.
2. Pay your small loan fast and focus on bigger loans once you have paid your smaller loans
3. Go for debt consolidation. However, make sure your new interest rate is lower than the average interest loan before consolidating your debt.

[Fergal]

Avoiding debt in the first place is often the best strategy. There are some good tips here, even if they are not easy for someone in debt to implement. If someone has limited income and debt problems, it's not easy to start paying more to start clearing those debts. However, if you can find a way to cut other expenses and start to clear debts, this is a great step towards more financial freedom.

[Mika]

If you have debt, you should start cutting your necessity as well. Why should you enjoy coffee and ice cream when there is outstanding loan. Why should you drive a car when you are not being able to pay your debt.

[sweerie_banana]

I usually have short-term debts, which could be because I have no offline source of income to help me pay them off but eventually I end up paying.

[Jem Smith]

If you have debt, you should start cutting your necessity as well. Why should you enjoy coffee and ice cream when there is outstanding loan. Why should you drive a car when you are not being able to pay your debt.

I wouldn't really call those necessities. Necessities are things you can't cut back on, like rent, basic food and electricity.

[Mika]

If you have debt, you should start cutting your necessity as well. Why should you enjoy coffee and ice cream when there is outstanding loan. Why should you drive a car when you are not being able to pay your debt.

I wouldn't really call those necessities. Necessities are things you can't cut back on, like rent, basic food and electricity.

Agreed. But some people have difficulty in differentiating what is necessity and what is not. Some people cannot get started with work unless that have a coffee on their table.

[Jem Smith]

If you have debt, you should start cutting your necessity as well. Why should you enjoy coffee and ice cream when there is outstanding loan. Why should you drive a car when you are not being able to pay your debt.

I wouldn't really call those necessities. Necessities are things you can't cut back on, like rent, basic food and electricity.

Agreed. But some people have difficulty in differentiating what is necessity and what is not. Some people cannot get started with work unless that have a coffee on their table.

Whether someone has a morning coffee or not is probably not going to make much difference in terms of clearing major debts. It's just going to make people miserable.

[MOSIUR]

You have written very well in case of debt. Human beings do not think and apply it in such a way as you mentioned some strategies.

[Mika]

You have written very well in case of debt. Human beings do not think and apply it in such a way as you mentioned some strategies.

A lot of people treat borrowed money as a free money and use it to buy liabilities instead of assets. That's why they cannot pay back debt.