How to pay off debt fast, so you can start saving and investing for the future even sooner

• To pay off debt fast, you usually need to make more than the minimum payment on your highest interest debt.
• If you have credit-card debt, consider opening a balance transfer card with a 0% introductory APR and paying off that balance within the promotional period.
• Then follow the debt avalanche method in which you put any extra money toward your highest interest debt, while continuing to make the minimum payment on all the rest.
• You can use an online calculator to figure out exactly how much you need to put toward the monthly payment to pay it off in your ideal time frame.
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Carrying debt for too long - even if you're leveraging it to grow your wealth - can quickly begin to feel like a burden. 

Most of us don't have the physical cash to pay for everything we want, whether it be a house, car, vacation, or education. A loan or a credit card can help fill in the gaps, but that's money you have to pay back, almost always with interest. Usually the faster you pay it back, the less you'll owe in total when it's all said and done.

Here's how you can make a plan to pay off your debt quickly, so you can put your money to better use and start building wealth even sooner.

How to pay off debt fast

1. List all of your debt

If you have multiple sources of debt - say, credit-card debt, student loans, and a personal loan - the first step is making a list of each along with the outstanding balance, the interest rate, the minimum payment, and the payment due date. Google sheets - or pen and paper, if you're old school - can be an invaluable tool for keeping track.

This can be an intimidating exercise for people with a lot of debt, but there's no way to make a clear plan for tackling it without a hard look at the numbers.

2. Avoid taking on more debt

Taking on more debt while you're trying to repay a load of other debt can complicate things. While you're in repayment mode, avoid taking out another loan or using credit cards, unless you can absolutely afford to pay off the balance at the end of the month. 

3. Call your bank and ask for a lower interest rate

Most people don't know you can call your credit-card issuer to ask for a reduced APR (annual percentage rate), which can make a difference of hundreds of dollars in interest payments. Eight in 10 credit-card holders who asked for a lower interest rate in the past year were granted one, according to a survey from CompareCards.com. The average reduction was six percentage points.

4. Consider consolidation

If you have debt on multiple credit cards, you may consider consolidating your balances into one so you can make a single monthly payment.

A balance transfer card allows borrowers to transfer their balances onto a new credit card, typically with a 0% interest rate for an introductory period of time. If you're able to pay off your debt within the promotional period at a 0% interest rate, you have the potential to save a lot of money on interest. Note that you'll be responsible for paying a transfer fee between 3% and 5% of the total balance.

You can also consolidate student loans into one, yielding a single monthly payment and potentially even a lower interest rate.

5. Make at least the minimum payment on every card or loan

Whether you have two sources of debt or five, you should always make the minimum payment on every card or loan to avoid late fees and major dings to your credit report. 

6. Pay more than the minimum on the highest-interest debt

Since your main objective is paying off your debt as fast as possible, concentrate any extra funds toward the debt with the highest interest rate (experts call this the debt avalanche method).

Focusing on paying off the most expensive debts first can speed up the entire repayment process as you save money on interest. Even an extra $100 a month can make a huge difference, shaving months or even years off your repayment period. 

One exception: If you opened a balance transfer card with a 0% introductory rate, you need to mind the time frame. That will likely be your lowest-interest debt, which would put it at the bottom of the priority list if you're following the debt avalanche method. But, you can't spare much time with these cards as the promotional period is finite, so crush that debt first and then move on to the rest.

7. Establish a payoff date

Paying off debt is a good goal to have, but paying off debt by a specific date is even better.

There are various online calculators that can tell you exactly how many months you have until you're free and clear, according to your current interest rate and monthly payments. If 18 months sounds like too much, increase your monthly payment by $50 or $100 to start and see what difference it makes.

Related coverage from How to Do Everything: Money

• How to consolidate credit card debt

• Here's exactly what it takes to have an excellent credit score

• How to consolidate your student loans

• How to pay off student loans faster

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