Nobody wants to hold onto credit card, medical, or student loan debt forever. So it’s not surprising that we frequently hear from LendingClub members about the many ways they’ve found to pay off debt quickly. Most use a combination of reducing the cost of their current debt management plan, saving money, or earning more to make larger payments and clear out debt faster.
Here we’ve rounded up some of the most frequently mentioned ways members use to pay off debt fast and a few financial health tips. Hopefully one of these will inspire you to start tackling yours and become debt-free.
As a Lyft driver, TaskRabbit, or Instacart shopper, many of our members are earning extra cash by doing part-time work whenever it fits into their schedules. You just download the app and sign in when you want to pick up a gig. If in-person services aren’t your cup of tea, sites like Upwork and Fivrr will connect you with something you can do online. You can find customers who have a need for writing or editing work, updating their websites, or even making social media posts. Try thinking about what experience you already have, and build on it to help with your irregular income budget. Then devote your extra income to pay down debt.
But be smart. Consider whether you have to take on any new expenses that will negatively affect your credit score. For example, as a Lyft driver, you might need to upgrade your car. And remember that with sharing-economy apps, you’re an independent contractor. Be sure to keep up with your budgeting and to set aside money for your personal loan tax bills, as employers usually won’t withhold them.
Some members value predictability over flexibility and have taken on a part-time (second) job in addition to their full-time job. A part-time job can be something more fun than what you do in your regular job, or it could be a stepping stone to a new career. With a steady paycheck, you can project exactly how much you’ll earn each week, and that helps you budget to pay off your debt fast.
Members who live near popular tourist destinations or live in a city with lots of business travelers are putting their extra bedrooms, garages, granny units, and converted sheds to work for them. There are lots of ways to earn extra income by renting out your space on Airbnb, Homeaway, VRBO, Flipkey, or other alternative travel accommodation sites. If you’re organized, have a desirable space, and enjoy meeting new people, you may be able to earn a significant monthly income this way.
Some money-wise members are even renting out their apartments and homes while they’re on vacation or visiting friends and family out of town. Either way, the money you make while you’re away helps you avoid accumulating more debt or pay down debt quicker.
If you’re not comfortable hosting strangers, many of our members are sharing expenses with a friend. With a roommate, you can not only split the rent but share household bills such as water, internet/streaming, gas and electricity, and even groceries. Besides saving on rent and having someone to come home to at the end of the day, there are lots of advantages to having a roommate.
Our members know (and you do, too) how quickly bank fees can add up. Instead, look for a free checking account and accounts that help you avoid ATM fees. Many banks waive the monthly service fee if you keep a minimum balance or receive a certain number of direct deposits (or amounts in direct deposit) every month. Take steps to ensure you don’t incur costly overdraft fees. For example, keep a buffer amount in your account, and confirm you have overdraft protection on your debit card. Once you get a handle on it, start redirecting the money you’ve been spending on bank fees toward your balances.
Most of us have outgrown something that somebody else might pay for. Clothes that don’t fit. Athletic gear never used. Furniture that doesn’t match the new decor. Lots of our members tell us they’ve started listing their stuff on Craigslist or Facebook Marketplace and pocketing the extra cash. And if you’re paying for a storage unit, you can save even more by cleaning it out, selling (or donating) what you don’t need, and losing the monthly storage charge.
It’s easier than ever to give up cable TV. Nowadays there are many options for watching TV online for free. Instead of subscribing to an expensive cable package, you can watch free channels (you might have to put up with some sponsored ads), subscribe to one or two inexpensive platforms, or pay as you go for specific programs and instead listen to come of the best finance podcasts.
Lots of companies will pay you to participate in an in-person or online focus group. This can mean anything from testing products or simply giving your opinions on products you’ve already using. Many members tell us they’re earning $100 or more for just an hour or two of their time. And if you happen to live near a college or university, try enrolling in a research study. You can earn up to $25 for trying out the latest flu vaccine or more than $5,000 for tests that require you to stay overnight or return for follow up.
So when it comes to paying down debt, try something new, get creative and make it an adventure. The things you do that get you closer to paying off your balances or paying off a personal loan early could bring new skills, new friends, and, potentially, an ongoing new source of income.
And finally, another smart way to pay down debt fast is with a fixed-term personal loan—specifically, a balance transfer loan (which is completely different than a balance transfer credit card). Balance transfer loans allow you to consolidate high interest rate debt and credit cards into one low monthly payment at a fixed rate and term. That means you’ll be able to circle the payoff date in your calendar.
You can begin to pay off debt by first setting a budget that you can stick to. List out all of your current expenses and begin to cut off the non-essentials. Next, avoid getting into more debt or spending money that is not yours. Then, find creative ways to make more money to pay off any existing debt, like the ones listed in this article.
There are 4 main ways to pay off debt quickly. The first is to try the debt snowball method — which is paying off just a tiny bit of your debt, then increasing to larger sums of money overtime. You can also focus on paying more than the minimum repayment amount on your credit cards. Finally, earning a second income with a side hustle as well as asking for lower interest rates on your credit cards are great ways to pay off debt quickly.
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