Ways To Get Out of Debt Fast

Climbing out of debt may seem impossible. I know because I’ve been there. I owed $80,000 including my credit card and student loan debt.

You’ve probably read tips from the experts who say to get a second job, never eat out, and maybe even stop contributing to your 401(k) until you’re debt-free.

But your time and freedom are valuable, too. So are your future plans. You can preserve some quality of life while also working to get out of debt.

10 Ways To Get Out of Debt

Here’s how to get out of debt fast:

  1. Track What You Owe
  2. Create a Debt Management Plan
  3. Negotiate Interest Rates
  4. Consolidate Your Debt
  5. Pay Extra Each Month
  6. Cut Costs on Everyday Expenses
  7. Start A Side Hustle
  8. Sell What You Don’t Need
  9. Do a Balance Transfer
  10. Ask For A Raise

1. Start Tracking Your Financial Life

To get out of debt you need a clear picture of your financial life. Don’t worry, it’s easier than you think. No need to dig up old bank statements or gather all your credit card bills.

You just need an online dashboard for your financial life so you can see how much money you owe, how much money you’re spending, and how much money you’re making. All in one place.

Free Tools Help Manage Debt

The best money apps make it easy to track and manage your entire financial life so you can manage your side hustle, budget, and full-time income from anywhere.

For example, Personal Capital allows you to add your debt, loans, credit cards, and bank accounts so you see your entire financial life in one place. It’s also completely free.

Free apps like Credit Karma can help you track your debt and keep an eye on your credit score.

FREE TOOLS: Personal Capital and Credit Karma

2. Create a Debt Management Plan (DMP)

Now that you can see all of your debt in one place, it’s time to come up with a debt management plan. Create this yourself using the strategies in this post or hire someone to build it for you.

Debt management plans help people who want long-term solutions to stay out of debt for years to come.

Unlike many other debt relief solutions, a debt management plan will also help you increase your credit score so your future loans will have lower interest and better terms.

Make a Budget

You will need a good budget template, either on paper or online. Seeing what you spend helps you cut unnecessary spending and redirect that money toward debt.

Be leery of debt management companies. If you decide to hire some help I’d recommend consulting someone you know or a money coach you trust.

If you do decide to work with a debt management company, pick one that has a proven track record of helping consumers.

As you decide how to spend your money, make reasonable goals you can sustain.

For example, don’t bank on never eating out again. Instead, set goals based on what you will do: I will eat out only twice a week.

Learn more:

Avalanche vs. Snowball

When you have several troublesome credit accounts and you’re not sure where to start, focus first on the account with the highest interest rate. When you’ve paid it off, move on to the next highest rate, and so on.

We call this the avalanche method because you’re building momentum. Each paid-off account gives you more spending power to tackle the next account.

If all your interest rates fall within the same range, use the debt snowball approach instead: Pay off the smallest balance first and then gradually build up to the most intimidating account.

Once you get there — having paid off smaller accounts along the way — you can focus all your spending power on the biggest target.

(Both these methods assume you at least keep all your accounts current while focusing your special efforts on a single account.)

3. Negotiate Lower Interest Rates on Your Debt

Do you have a good credit score (700 or above)? You may qualify for lower interest rates on your credit accounts.

Instead of researching debt relief companies for hours on end, just call your creditors. Ask if they will lower your interest rate.

If they say yes, you could save thousands of dollars on interest and relieve some stress. Even if they say no, you won’t harm your credit score by asking.

Refinance if it Saves You Money

If you have student loan debt consider student loan refinancing. You can check your refinance rates in less than three minutes without impacting your credit score. Check out the student loan refinancing rate search engine at Splash Financial.

Lowering your interest rates can lower your payments, but be careful: If you refinance federal student loans you could lose built-in consumer protections.

And be sure to check out the new lender’s fees before refinancing. Sometimes fees can erode the money you’re saving with the lower interest rate.

4. Consolidate Your Debt

Having multiple debts is not necessarily bad but it will increase your chance of having accounts with high-interest rates. If you struggle staying on track with your payments, debt consolidation may be the way to go.

This debt solution will allow you to combine your debts into a single account with a single interest rate. The rate should be lower than your current rates.

An online debt calculator — and getting information from an accredited loan company — can help you decide whether to pursue this type of debt relief.

Don’t Open Any New Accounts

Debt consolidation will help only if you don’t open any other new accounts until you’re out of debt.

Lowering your number of accounts just so you can open new accounts will cost much more — and your credit score can tank.

Consolidating and sticking with the plan streamlines your financial burdens into a single monthly payment, offering a lower interest rate, decreasing your risk of bad credit, and helping you pay off your debt faster.

5. Pay Extra Each Month

Paying the minimum balance on a credit card? You’ll spend year after year trying to pay off the account, dragging astronomical interest rates every step of the way.

Any extra money you can put down on this kind of debt will quicken your pace along the road to becoming debt-free. For best results, stop using the card, too.

This works for fixed, secure loans such as mortgages, too. Paying one extra payment a year — $100 extra a month if your house payment is $1,200 a month — can knock years off your mortgage debt.

6. Cut Costs on Everyday Living Expenses

Not every debt solution requires outside help. Sometimes you can cut expenses at home and redirect the savings toward debt.,

Unplugging electronics and appliances, shopping less, couponing, and cutting back on restaurant food and coffee shop coffee can save thousands of dollars a year.

Try categorizing your monthly expenses, either by hand or with budgeting software, to find areas where you can cut costs.

If you have hundreds of thousands of dollars of debt, don’t automatically resort to this option. This sort of lifestyle change can be difficult for people who need to cut costs substantially.

Frugal living can help you invest more money into paying off your bills and less money on outside activities. Frugal living can help prioritize other facets of your daily life, too.

Like I said above, make lifestyle changes you can actually sustain. And set affirmative goals. “I will go to two movies a month” works a lot better than “I won’t go to the movies every week.”

7. Start a Side Hustle

By starting a side hustle you can earn additional money that can go toward paying off your debt.

A side hustle can also build your resume. Look for a temporary position if you’d like to work only until you’ve eliminated your debt.

If you have a large family or numerous obligations, getting a part-time job or freelancing can become a major stressor. If possible, find a way to work from home so you can still manage your other responsibilities.

Eliminating debt should relieve stress. If the thought of getting an additional job creates anxiety, consider one of the many other strategies available.

Make Extra Money Shopping & Surveying

You won’t get rich quickly, but taking online surveys can generate some extra cash each month.

Other people prefer getting rebates and shopping rewards through apps like Ibotta and the Capital One Shopping browser plug-in.

Some of these services pay out in gift cards; others send a check or transfer cash. Even if you get paid with gift cards, you could use the gift cards instead of cash which means you’re sending more money to fight debt.

Check out my list of the best survey sites to see which ones will work best for you.

8. Sell What You Don’t Need

Don’t have time to work more or get a side hustle going?

Consider selling some belongings for extra cash. Sometimes your old clothes, cell phones, textbooks, and appliances could generate hundreds of dollars. Decluttr is a great site for selling unused items.

The income earned from working part-time or selling items should be used solely for paying off debts in order for this method to work.

Check out my post on the best selling apps to help you get started.

9. Do A Balance Transfer

When your credit’s in decent shape, you could get a balance transfer credit card and consolidate your existing credit card debt. Some cards even have 0 percent interest for an introductory period.

As with any credit card, use it responsibly. Examine the habits that got you into debt in the first place and be sure your new card isn’t licensed to repeat the process.

10. Ask for a Raise

You never know, and failure is certain only if you never ask. I’m assuming, of course, you work hard and add value to your team.

If you do get a raise, use all the extra money to pay down debt — at least until you get some accounts paid off.

Additional Strategies

If you didn’t find the right answers along my path above — or if you’re looking for answers to a more specific problem — consider these strategies:

Use a Home Equity Line of Credit (HELOC)

Your debt consolidation could get a boost from your home equity — assuming you own your home and have lived there several years. A home equity line of credit (HELOC) could unlock this potential.

How does it work? Let’s say you closed on a $200,000 home 10 years ago and by now you’ve paid the mortgage down to $175,000 — plus your home has increased in value to $225,000.

The difference between how much you owe ($175,000) and your home’s value ($225,000) is your equity. In this scenario, your equity would be $50,000.

A HELOC lets you borrow against this equity as needed. This kind of loan works like a credit card except you’re using your home’s value as collateral which means you could save a ton on interest charges.

Depending on your credit history, you could access this money at 3.5 to 4 percent interest — significantly lower than other forms of borrowing!


  • Interest Savings: Think of all the interest charges you could save if you used HELOC funds to pay off high-interest credit card debt or even a 10 percent interest convenience loan. Your HELOC interest could more than pay for itself.
  • Interest Deductions: A HELOC is a form of mortgage so your interest charges — up to $100,000 a year — are tax-deductible.
  • No Spending Oversight: You can use the money from your HELOC as you want. But you should always spend the money responsibly. After all, the money is coming from the equity you’ve built in your home. Make sure you’re using this money to move your life forward by getting out of debt or increasing the value of your home.
  • Borrow as Needed: A line of credit, by its nature, stays in standby mode until you need it. With a HELOC of $50,000 for example, you could borrow (and pay interest on) only $15,000. Even if you maxed out the credit line you could pay it down and then re-use the funds on another project or to meet another goal in the future.


  • A New Lien: Since your home’s value secures your HELOC, your lender would own a portion of your home along with your original mortgage holder. You couldn’t sell your home without paying off both your mortgage and your HELOC.
  • Regular Payments: A HELOC, once you draw from it, requires regular monthly payments. Even though you could be saving a lot in interest, make sure you budget for these monthly payments before borrowing.

Settle Your Debt

If you are getting harassed by debt collection agencies, your accounts are not in good standing.

Maybe it’s time to start negotiating with your lender. A debt relief company could help you slash your total amount owed.

Settling Debt Affects Your Credit & Taxes

There is no guarantee your lender will accept the negotiation. If it does, your credit score will suffer because you are not paying the total debt in full. You will also likely accrue interest and other fees during the settlement process, which usually takes at least six months.

Depending on the settlement plan and the specifics involved, the money you save may be seen as additional taxable income. Many debt settlement companies will charge large fees which cut into your savings.

Thanks to the Fair Trade Commission ban on upfront costs, these fees can be charged only when your settlement is complete.

Assuming you make all new payments in full and on time every month, debt settlement can save you money. You could eliminate the debt while paying as little as 50 percent of your original balance over three to five years.

Student Loan Forgiveness

On average, students borrow more than $30,000 for higher education. That amount increases dramatically for borrowers with advanced degrees.

Some borrowers can apply for public student loan forgiveness, especially if they work for a non-profit or the government.

Teachers can apply for Teacher Loan Forgiveness, while borrowers with qualifying permanent disabilities could get Disability Discharge Student Loan Forgiveness. Through these programs, students and former students could get all or most of their loans forgiven after meeting some criteria.

The programs listed above are just a small selection of the dozens of options available. Nurses, medical professionals, and military personnel, for example, can usually find other student loan forgiveness programs through their employers or by working with a financial counselor.

Eligibility requirements for these programs differ. Typically programs are available only for borrowers whose professions actively give back to the community. Also, borrowers qualify only after working a certain amount of time.

Some programs, such as Public Service Loan Forgiveness, are available only after you have made 120 concurrent payments and work in specific fields.

The approval process can take months, so stay patient.

The Last Resort: Bankruptcy

Bankruptcy should always be your last resort. Individuals and small business owners have these options:

  • Chapter 7: This allows you to liquidate the remaining assets to close your credit accounts in a short amount of time.
  • Chapter 13: Sets up a reduced repayment plan with your creditors over a longer period of time.

If you do end up in this situation a credit relief expert can help. The expert should help determine which category best suits your situation. And, the expert can go to court to either liquidate or reorganize your debts. This way, you no longer have to deal directly with credit lenders.

You will likely lose some valuable assets to help pay off lenders. However, you will not lose personal belongings or your job in the process. Many of those who file for bankruptcy see the process as a refreshing way to start over financially.

Taxes, student loans, child support, alimony, and government debts cannot be resolved through bankruptcy.  Depending on your circumstances, you can lose your car, home, and investments. Bankruptcy also damages your credit for 10 years, and there are hundreds of dollars in associated fees.

Frequently Asked Questions About Debt

Is there a statute of limitations on debt?

Yes, every state sets a statute of limitations on debt, but this doesn’t mean your debt goes away after the statute expires. It means you can’t be successfully sued for collecting debt beyond the statute of limitations.

Remember that each time you pay on your debt or even call to discuss your account, you could be restarting the stopwatch on the statute of limitations.

Each kind of debt — medical debt, consumer debt, fixed loans — may have a different statute in your state. Statutes tend to average seven years with outliers in both directions.

What is a debt management plan?

People with heavy credit card debt may benefit from a debt management plan.

You’d pay a monthly fee to a credit counseling agency. The agency will negotiate with your lenders on your behalf and create a new path to lead you out of debt, usually after three to five years of payments.

Be sure you can afford the payments on the new plan before agreeing to this kind of deal; missing payments could set you back further.

Can you go to jail because of debt?

Consumer debt like a credit card account won’t land you in jail. Mortgage and auto lenders won’t prosecute you criminally either.

You could be prosecuted for missing tax or child support payments.

Should I use my retirement savings to pay off debt?

Cashing out your 401(k) to pay off debt doesn’t make a lot of sense. You could face tax penalties and lose a lot of value in fees. Plus, you’re taking from your future to pay for the past.

Many employers will let you borrow from your 401(k) money. This is a better idea, but the missing money from your retirement account will not be growing while you’re using it to pay off debt. It’s still not ideal.

I’d look for a better alternative before going this route. If you decide to borrow against your retirement account, run your ideas by a financial advisor or at least your HR staff to be sure you understand the pros and cons.

Can I ask debt collectors to stop calling?

Yes, you can ask collectors to stop calling you by sending a cease-and-desist letter. This does nothing to alleviate your debt, though.

Can creditors take your wages?

It’s possible for a creditor to garnish your wages, but it’s not likely. They’d first have to sue you and win a court-ordered settlement. Then if you failed to pay this settlement, your creditor could return to court to ask for your wages which a judge could grant.

Does medical debt go on my credit report?

Yes, medical debt impacts your credit score. More recent models of the FICO, for example, weigh medical debt less heavily than other debt. But this kind of debt will harm your score if left untamed.

Bonus Get Out of Debt Tip

Give Yourself a Break! Many people just like you are in the exact same scenario. Take a breath, and know there are resources out there for you. Search for a community to help build you up. You are not alone.

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  • Comment Author image blank
    Great article! I like that you actually mentioned about getting anxiety from getting another job. I recently quit my second job because of my anxiety.
  • Comment Author image blank
    Thank you for this article. For a while, I completely stopped using credit cards and focused on frugal living. I have to agree with you, changing that one aspect of your spending can really have a powerful impact on your finances. Love your stuff. I hope to read some more throughout the week.
  • Comment Author image blank
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