How to Get Out of Debt Fast

The Importance of Getting Out of Debt Quickly

Not only does debt not go away on its own, it can grow worse very quickly.

The reason for this is that certain kinds of debt — specifically credit card debt — usually have high interest rates attached to them. This means that while you may be making minimum payments as you continue to charge your cards, your debt balance is growing at a much quicker speed than you can catch up with in the short term.

Even taking all future spending out of the equation, someone with $30,000 in credit card debt could be stuck making minimum payments for roughly 23 years and spending over $107,000* to pay off that debt.

The good news is that there are options to eliminate your debt much quicker, before it spirals out of control. Read on to learn how to get out of debt fast.

The First Steps

There are a few key steps you should take right at the start:

1. Figure out how much you owe on each account and in total.
   While it can feel uncomfortable to face your debt head on, it’s really the only way to begin to find solutions. Using either a piece of paper or a spreadsheet, itemize each debt, how much you owe on it, and the associated interest rate or APR.
   
   
2. Understand how you got in debt.
   For some people, the answer will be clear — medical bills, a job loss, or another unforeseen event. But for others, the debt may have been growing in the background without a realization of how bad it was getting.
   
   If this sounds like you, you’ll want to pull out your credit card statements and figure out if you’ve been making regular purchases you don’t really need.
   
   
3. Stop using your credit cards.
   If you can, try to stop using your credit cards. Using a debit card is a great alternative because it stops you from spending more than you actually have, and it won’t put you in even more debt through high interest rates.

How To Get Out of Debt Yourself

Budgeting

You should always be working to spend less than you’re making, but this is especially true when you’re trying to work your way out of debt.

Start by setting a budget of how much you can afford to spend each month and closely track your spending so that you don’t go over budget. If you also want to pay off your debt, you should set aside a meaningful amount each month for this purpose.

If you don’t have enough money left over each month to make a dent in your debt, you should continue to budget, but you’ll need a higher-impact debt-tackling method.

The Snowball and Avalanche Methods

Both the snowball and avalanche methods involve paying off one debt at a time. The snowball method will have you paying off your smallest debt first, then second smallest, and so on. On the other hand, the avalanche method instructs you to pay off your highest interest rate debt first, then the next highest interest rate, etc.

The avalanche method is a much more logical approach than the snowball method — it will help you get out of debt sooner and for less money. But sometimes the psychological impact of wiping out a higher number of debts keeps you motivated. If a person has many smaller debts, they may feel more peace of mind attacking those first, even if it’s not saving them time and money.

These methods only work if you have extra money at the end of the month. If you’ve budgeted and you’re still struggling to save, it’s time to look for debt help.

Change Your Behavior

After looking at your credit card bills, if you’ve realized you’re overspending, there are actions you can take to change. If the issue is impulse buying there are many ways to address this kind of behavior. Some of them include:

• Shopping with an accountability buddy
• Leaving your credit cards at home
• Waiting for a day or two before making a purchase

But if you’re still having trouble controlling your overspending, consider getting help from a financial therapist.

How to Eliminate Debt With Help

You don’t have to tackle your debt alone. There are a number of options that can speed up the time to put your debt behind you.

Refinancing Your Current Debt

Some people are able to work with their lenders to refinance their mortgage, car loan, personal loan, or student loans to a lower rate. Unfortunately, the ability to do this typically depends on your having a good-to-excellent credit score and also the larger state of the economy. If interest rates are high across the board, this likely won’t be an option.

Debt Consolidation Loans

When you’re extended a debt consolidation loan, the funds go to paying off your current debts. You’re now only beholden to a single payment, ideally with a lower interest rate. Whether you can access good loan terms is reliant on national economic conditions and a good credit score.

A Debt Consolidation Company

Aside from the last resort of bankruptcy, the fastest way to get out of debt is typically with the help of a debt consolidation company.

When you enlist the help of a company like Beyond Finance, you can:

• Lower your eligible monthly payments by 40% or more
• End the cycle of compounding interest
• Get out of debt in 24–48 months

Getting Out of Debt - Frequently Asked Questions

Say Goodbye to Your Debt With Beyond Finance

While there’s no simple, overnight way to eliminate your debt, Beyond Finance can speed up the time to pay down your debts within a few years — instead of a few decades. 

We can lower your eligible monthly payments by more than 40%, allowing you to save money while you pay off your debts. You’ll also have access to:

• Around the clock client service
• An easy-to-use app to track your program progress
• Resources and client sessions to support your wellbeing along the way

If you’d like to learn more about how to get out of debt with Beyond Finance’s help (and how we can help you save money in the process), get a free consultation with a Consolidation Specialist. They’ll walk you through your options and help you make the best decision for you.

*Based on cost and timeline to get out of debt making minimum payments on credit cards for individuals with fair credit, APR of 25%, and assuming a payment of 2.5% of the balance. Please note that, assuming the principal balance does not increase due to additional charges, fees, and interest, the required minimum monthly payment will decrease over time as additional minimum monthly payments are made and reduce the total balance.