So your entire paycheck is going into paying off debts. You might be thinking: How long would this go on? When will I be able to use my paycheck as I want?
Luckily, there are ways to pay off debt faster than expected. Here’s a closer look at four standout ways:
- Take Out a Debt Consolidation Loan
One of the most effective ways to reduce debt is to take out a debt consolidation loan. It involves taking out a loan that bundles all your existing debts into a new monthly payment. This can include credit card loans, personal loans, and mortgage payments.
You will pay a single monthly bill, often at a lower interest rate or with a reduced monthly payment. You can also make weekly or fortnightly payments to pay off the debt faster.
The best part? A debt consolidation loan can actually boost your credit score. When you make consistent, monthly payments, your credit utilisation ratio will reduce. This will help you acquire loans with better terms in the future.
Moreover, easy apply loans for debt consolidation are available as fast as 24 hours after approval. Just make sure you meet the eligibility criteria. You should be:
- 18 years old or over.
- A citizen or permanent resident of Australia.
- Free from financial hardship with other providers.
- Free from any outstanding or unpaid defaults.
- Follow a Debt Repayment Strategy
Next, consider following an expert-recommended debt repayment strategy. There are two common strategies:
Debt avalanche method
It involves paying the minimum to all debts before putting extra money toward the debt with the highest interest rate first. This method will help you save money on interest.
Debt snowball method
For those who want quick wins and instant motivation, the debt snowball method is an excellent option. You pay minimums on all debts, then make extra payments on the smallest balance first. Once a debt is cleared, you roll the payment amount into the next-smallest debt.
Debt-repayment strategies will help you build financial awareness in the long run.
- Pick Up a Side Hustle
Picking up a side hustle only to repay your debt can be super beneficial. You will be motivated to keep going and have a clear idea of where your side income is being used.
The best part? There are a ton of side hustles you can start with little to no investment. Examples include:
- Dog walking
- Freelance writing
- Copywriting
- Virtual assistance
- Online tutoring
- Delivery driving
You can also put in extra hours at your primary job to earn more. Put all your extra income in a separate checking account and use that to pay off your debt.
- Find Small Savings
You know those small expenses that appear too little to make a dent? It’s time to pay close attention to them.
Assess your monthly expenses and identify non-essentials. Track every dollar you’re spending to identify where money is leaking out. This could be:
- Unused entertainment platform subscriptions
- Daily coffee runs
- Convenience store snacks
You can take several steps to cut these expenses, such as:
- Packing lunches
- Limiting dining out
- Shopping with a list
- Using budgeting tools to track your money
