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7 Steps to Paying Off Your Loans Quickly

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7 Steps to Paying Off Your Loans Quickly

Loans are very helpful instruments. They allow us to do all sorts of things that we otherwise wouldn’t be able to afford such as buying a house (mortgage), going to college (student loan), starting a business (business loan), and many more.

However, with any loan comes risks and obligations. The money you receive isn’t for free, and you have to repay the loan plus interest.

Sometimes this can become difficult. The business you invested in might be struggling, you may have lost your job, or any number of reasons can mean making your repayments becomes very challenging. This can cause debts to spiral, making it even more difficult to pay them off.

There are steps you can take to help you in these situations though, and there are different strategies that will allow you to pay off your loans more quickly.

Through good financial planning, you can make sure you’re paying off your debt more quickly, and the great thing is, small changes can make a big difference. Whether you’re struggling to keep up with your repayments, or you’re simply looking to pay off your debt more quickly, here are 7 steps you can take.


Budgeting is a simple tool, but there are still lots of people who don’t take advantage of it.

When you sit down and write out all your spending, you’ll find areas where you can make savings, making it easier to pay off your debt more quickly. We all think we have a good idea of how much money we have going in and out each month, but it’s only when you write out a budget that you see it in complete detail.

If you’re going to identify areas where you can save, then it’s important you know your spending inside out. The only way you can do this is by writing out exactly what you spend each month and where you spend it. You’ll find a lot of your spending is essential and can’t be changed, but you will find there are areas of spending where you can quite easily make cuts.

If you want to achieve a goal such as paying off your debt, then you need a plan and your plan starts with budgeting.

Pay in Full Whenever Possible

When you see your statement, the minimum payment option is always going to look very appealing. It gives you the option of paying a fraction of the bill and worrying about the rest at a later date. You think to yourself, “this month has been difficult, but next month will be better, I can sort it out then.”

The thing is, you haven’t just pushed the problem down the line, you’ve also made it much bigger. Next month might be a better month for you, but the bill is going to be that much bigger, meaning you’re always working to catch up.

Rather than always working to catch up with your debt, you want to try and get ahead of it whenever possible. This is simply because of interest. You want to be paying as little interest as possible; it’s already hard enough to pay off your debt before you even think about paying interest on top of it.

So, work as hard as you can to limit the amount of interest you pay by paying in full whenever possible. It might be more difficult in the short-term, but it’s going to save you a huge amount in the long run.


Not every debt you have will be the same. Each will have different balances, and each will have a different interest rate, which means some debts cost you more than others.

This is why it’s a good idea to write out what debts you have, how much you owe, and how much interest you pay on them. Once you do this, you can work out which debts should be prioritized, and which ones can wait to be paid off.

For example, if you have one debt which has a much higher interest rate than the others, then it’s going to save you money if you can prioritize that payment. Likewise, if you have a debt that’s nearly paid off, then finish off the payments so you’re no longer paying interest on it.

Remember that you can only pay what you can afford to repay, and make sure the money you do payback is being used strategically so you limit the amount of interest you pay over time.

Make Use of “Fresh” Money

When you have extra money coming in that you hadn’t expected, then it can be worthwhile using it to help pay off your debts. If you get a raise, a bonus, or perhaps some inheritance, this is the ideal opportunity to pay off more debt whilst still maintaining your net income after debt repayment.

Say you pay $500 a month, and you find a way to pay an extra $100, this is going to make a massive difference and with your newfound money, it shouldn’t impinge on the quality of your life.

Whenever you can pay extra it does make a big difference to your debt, but it’s important not to overextend yourself. There’s no point taking a healthy account into debt just to service your other debts, so make sure you’re paying extra only when you can afford to do so.

A raise or other unexpected windfalls give you the perfect opportunity to do this.


As we mentioned when we talked about prioritizing, not all debts are the same. Sometimes you can make your debts more manageable by refinancing and changing the structure of your debt.

Instead of having bills coming from lots of different creditors, this can mean you have one monthly bill from one creditor, and you might be able to lower your interest rate. It all depends on the nature of your debt, but it’s worth looking into.

Many banks will offer 0% balance transfers where you can transfer your credit card debt onto one single account and pay 0% interest over an initial period. This can really help you get on top of your debt and start paying it off, so that when you do start paying interest again it’s in a much more manageable position.

Be Aware of Your Rights

It can feel like a lonely place when you have debts that you’re struggling to control. There is help available though, and there’s plenty of information out there. If you feel like you’re struggling with your debt, then you can reach out for free advice – there are lots of not for profit organizations out there that are dedicated to helping debtors.

Equally, it’s important that you make sure you understand your rights and obligations by keeping track of updates on debt and consumer protection lawsuit legal news.

You shouldn’t feel like you’re being harassed to pay back your loans, and there are laws in place to protect you. You can only payback the money you have, and you shouldn’t be threatened when you can’t.

Make sure you’re aware of these rights, and don’t be forced into paying more than you can afford to pay. If you feel like you are being pressured or harassed, then speak to a lawyer, and make sure you have the protection that’s afforded to you by law.

There are rules set out by the Fair Debt Collection Practices Act that dictate how debt collectors should behave, so don’t feel like you have to put up with harassment.

Stay Positive

When you’re struggling with debt, it’s easy to let it get you down. However, it’s important to find ways to stay positive and keep going.

If you let debt get on top of you mentally, then it puts so much stress on your body and mind that it can lead to health complications. To combat this, make sure you’re sharing your problems with loved ones, and not putting all the pressure on yourself.

You need to escape from things sometimes, so make sure you’re still finding time to relax and take your mind of things, even if it’s only temporarily.


When you start to see your debt increasing, it’s easy to feel the pressure and in some cases lose hope, but it doesn’t have to be that way. There’s lots of help out there for people dealing with debt, and you don’t have to deal with it alone.

There are also tangible steps you can take to help you deal with your debt. On their own, they might not make a huge difference, but when you put them all together, they can be a huge help:

  • Budget
  • Pay in full when possible
  • Prioritize
  • Make use of new income streams
  • Refinance
  • Be Aware of your Rights
  • Stay Positive

If you’re going to pay your debt down quickly, then you’ve got to have a plan, and these 7 points will really help. Over months and years, they can save you a lot of money and help you become debt free.

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