3 Strategies to Lower Debt Fast

By Gabriel Rodríguez MONEY RESEARCH COLLECTIVE

March 28, 2025 11:32 AM

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Paying off your debt can often feel like a sluggish, painstaking process, but there are some promising strategies that can accelerate the process.

Read on to explore three of the fastest ways to lower your debt, plus learn some handy tips for lowering your account balances sooner rather than later.

Ways to Lower Your Debt Fast

While there are many strategies for tackling debt, not all of them are designed to work in the short term. Debt management plans and debt relief, for example, will take you at least a couple of years to finish.

The methods listed below, on the other hand, can make a dent in your account balances at a quicker pace overall.

1. Pay off high-interest debt first

Imagine you have two accounts:

Debt A has a principal of $8,000 at an 8% interest rate and a minimum payment of $240.
Debt B has a principal of $5,000 at a 24% interest rate and a minimum payment of $150.

Now, let’s say you have an extra $300 per month to put toward debt. If you were to put that all into the account with the smaller principal first (which also happens to have a higher interest rate), you would become debt-free faster and save about $700 in interest.

This shows why the debt avalanche method, a payoff strategy that targets debt with the highest interest first, is more efficient than focusing on your largest balance account. By taking care of high-rate debt first, you are effectively speeding up the payoff process because the account accumulates less interest overall.

2. Apply for a balance transfer credit card

If most of your debt is in credit cards, then getting a balance transfer credit card could be the fastest way to pay off your debt. A balance transfer credit card lets you move outstanding debt from one or more credit cards onto a new one with, generally, a low or 0% introductory APR period (typically 12-21 months).

This strategy is similar to that of debt consolidation, but for credit cards. The main benefit is that you save on interest in the long run, assuming you make all payments on time and before the promotional period ends. You also enjoy a simplified payment process since you don’t need to keep tabs on multiple accounts at the same time.

Some caveats of balance transfers you should keep in mind are that you may not be able to transfer all of your debt — these cards have credit limits too — and that you usually have to pay a fee for the transfer. Moreover, you may need a good or even excellent credit score to qualify for a balance transfer card.

3. Draw on side hustles and windfalls

Though not a formal strategy by any means, redirecting a combination of additional income from side gigs and any financial windfalls you receive to pay your accounts can have a high impact on your debt overall.

To increase your income, consider taking on overtime at your current job, starting a side hustle or part-time job, or freelancing in your area of expertise. You can also monetize a hobby or skill like crochet and woodworking, or sell items you no longer need. Even an extra $200-500 per month can significantly accelerate your debt payoff timeline.

Financial windfalls are large, often unexpected sums of money you receive. These could be a tax refund, work bonuses, cash gifts, an inheritance and insurance settlements. Using a large share of these windfalls for debt repayment while keeping a smaller amount for yourself can help speed up the payoff process while maintaining your motivation.

Tips to Pay Off Debt Faster

Below are some general tips you could consider to make paying off your debt even faster.

Use the 50/30/20 rule

The 50/30/20 rule refers to a strict budgeting tactic where you allocate 50% of your income to your necessities (housing, food, utilities), limit your discretionary spending to 30% or less and direct at least 20% of it to your savings and debt payments.

While this may work for some, it can be too slow if you need faster results. A more aggressive approach would be to direct 40% or more towards your debt obligations. To do so, you’ll need to cut your “wants” and optimize your “needs” accordingly. Consider using a budgeting app to stay on track, and monitor your finances weekly to catch overspending early.

Pay more than the minimum whenever possible

Making only minimum payments significantly extends your payoff timeline because it increases the total interest paid over the debt’s lifetime. You could instead round up payments to the nearest convenient number or redirect money to debt when you eliminate an expense.

Even small additional payments can significantly impact your payoff schedule. For example, adding just $50 extra per month to a $5,000 credit card balance at 18% APR shortens the timeline from 8 years to about 4 — nearly half of what it would take when paying its 2% minimum.

Seek free credit counseling

Credit counseling agencies charge for some of their services, but others they offer for free. You can ask for an initial consultation, which includes a comprehensive review of your finances, debt and budget. They also have a variety of educational resources available for clients.

When visiting a credit counselor, make sure to be as transparent as possible about your financial situation. After all, they can’t help you if they are missing important information. Make sure to bring any relevant documentation and ask questions about the options available to you and the resources they can provide.

Stop creating new debt

While it may seem obvious enough, it’s important to remind yourself that one of the most critical steps in becoming debt-free is to break the cycle of borrowing. Following a debt payoff strategy while continuously creating new debt is like trying to empty a bathtub while the faucet is still running.

One way to prevent yourself from reaching a new account is to identify your debt triggers, that is, the things that drive you to borrow. This could be social pressure, emotional spending or a lack of emergency savings.

However, borrowing can become a necessity in some cases due to circumstances that are out of our hands — or have careened out of control. If so, lowering your debt quickly might not be a reasonable option. That’s when long term strategies such as debt management plans and debt settlement, might be worth considering.