How to Get Debt Free Fast
In today’s economic reality, debt has become a part of many people’s lives. Some have taken education loans for their studies, some have taken bank loans to run their businesses, and many have fallen into the debt trap through credit cards to meet their daily expenses. Once debt starts, it becomes like a mountain. The burden of this debt not only creates financial stress but also mental stress. Therefore, many people want to know how to get debt free quickly. Although it is not an easy task, it is possible to get rid of debt quickly with proper planning and discipline.
First, a complete financial assessment must be done. How much money you have in debt, who owes you how much, what is the interest rate, and how important a loan is—all of this information is most important. Many people only know the amount of the monthly installment, but do not have an idea of the total amount of debt that needs to be repaid. This lack of awareness becomes a major obstacle to debt relief. Once a list of all debts can be made, it can be understood which debt should be repaid first and which is relatively less important.
Then the process of reducing expenses must be started. Although it sounds easy, in reality, it is very difficult. We have many types of expenses that we overestimate the importance of, but life can go on without them. For example, eating out for coffee every day, going to restaurants repeatedly, spending money on subscription services, etc. If you can identify and eliminate such unnecessary expenses, you will have some extra money at the end of the month. That extra money should be used to pay off debt.
One strategy for paying off debt is the ‘snowball’ method. In this method, you have to pay off small debts first. This way, you can pay off some debts quickly and stay mentally motivated. On the other hand, another method is the ‘avalanche’ method, where high-interest debts are paid off first. This reduces interest costs. Which method you follow depends on your financial and mental condition. However, both are effective strategies.
If you want to pay off debt, it is not enough to just reduce expenses, you also have to focus on increasing your income. Sometimes you have to find additional sources of income outside your main job. Freelancing, online tutoring, driving for Uber, graphic design, delivery services, blogging, or YouTube – these types of side hustles will help you earn extra income. If you use this extra income to pay off your debts completely, you will be able to get out of debt much faster.
One important thing is to stop taking new loans altogether. Many people take new loans while paying off their debts, which is never a good idea. If you really want to be debt free, then you need to stop taking all types of loans from now on. Stop using credit cards, or even if you use them when absolutely necessary, pay off the entire amount within a month.
It is also very important to keep in touch with your lenders. Sometimes, if you convince them well that you are interested in repaying the loan and are ready to make regular small installments, they can offer you some discounts or lower the interest rate. Sometimes, banks or NBFIs offer loan restructuring or rescheduling facilities, so that you can repay the loan on easier terms.
Some people consider taking a consolidation loan by combining personal loans. If you have a good credit score, you can take a low-interest personal loan and pay off all your high-interest loans. This will reduce your monthly payments and keep you free from the worry of multiple loans. However, it is better to talk to a financial advisor before making such a decision.
Another big opportunity comes when you suddenly get some money, such as a bonus, festive allowance, tax refund, accrued pension, etc. People usually spend or save this kind of money. But if you use that money directly to pay off debts, then the path to debt relief becomes much smoother.
Mental strength is the most important thing to get out of debt. Many times, we lose our way and fall back into debt. So you need to be encouraged by seeing your progress constantly. If you keep paying off your debt by 100 a month, it will be 1200 in a year, which can completely pay off many small debts. These small advances are the ones that ultimately lead to big success.
Participating in debt relief groups or forums on social media can also yield good results. You will find inspiration within yourself by reading the success stories of others. Sometimes we think that we are the only ones drowning in debt. But the reality is that many people have this problem. And many have successfully become debt-free. If you move forward according to the plan, you can too.
One last thing to say is that becoming debt free is not magic, it is the result of hard work, self-control, and awareness. If you really want it, it is possible to repay the debt on time and achieve financial freedom. Once you get the taste of a debt free life, you will understand how relaxing and liberating it is.