Having debt can be stressful, especially if you’re struggling to keep up with payments and receiving collection calls. Debt can affect your credit, your ability to build savings, and your overall budget. However, with some careful planning and discipline, you may be able to pay down your debt faster.

From having a part-time job to sharing expenses with a roommate, there are many creative ways to find extra cash you can put toward tackling your debt.

13 creative ways to pay off debt

From getting a side gig to using your tax refund, there isn’t a one-size-fits-all way to pay down debt. However, it’s important to find a strategy that makes sense for your financial situation, money management style, and budget. Don’t be afraid to try out different methods, or mix and match, until you find a solution that works best for you.

Here’s a closer look at some of our favorite clever ways to tackle your debt.

1. Consider a DIY debt-payoff strategy

The debt snowball and debt avalanche methods are two common ways some people choose to tackle debt head-on. Both use a DIY approach, but they work a bit differently.^[1]

Debt snowball method: This method is a simple way to get started and typically works best if you have a small amount of debt. You’ll see small wins quickly, so it’s a good way to stay motivated. First, pay the minimum due on all of your debts except for your smallest balance. Then put all of your extra funds each month toward your smallest debt. Once that debt is paid off, move on to the next-smallest balance. Do this until you work your way up to your largest balance.
Debt avalanche method: The avalanche method requires more discipline, but if you have a large amount of debt with high interest rates, you’ll save more money in the long run. Begin by paying the minimum due on all of your debts, then putting your extra funds toward the balance with the highest interest rate. Once the high-interest debt is cleared, move on to the debt with the next-highest rate, and so on.

2. Consolidate your debt

If you’re getting hammered by high interest rates, transferring one of your balances to a card with a 0% intro APR could be a great way to eliminate spiraling interest while paying down the debt. You’ll need good credit to qualify for a balance transfer card, so check your score and credit report before applying. Keep in mind, there’s usually a fee of around 3% to 5% of the transferred balance. If you’re trying to avoid paying interest, you’ll need to keep the account in good standing and pay off the debt before the intro APR period ends.

A debt consolidation loan is another way to consolidate high-interest debt into one easy-to-manage payment at a fixed rate and term. Compared to a credit card, you typically get a longer time frame to pay off the debt, and rates are often lower if your credit situation has improved. When shopping around, look for lenders, like LendingClub Bank, that let you check your rates without affecting your credit score.^[2]

3. Make extra payments

If you can swing it in your budget, try to make extra payments on loans and credit cards to help pay down faster. When you make additional payments toward the principal on accounts that charge interest, each payment going forward is calculated on a smaller balance. The benefits of extra payments can add up quickly, even if you’re only able to contribute a small amount.^[3]

4. Use financial windfalls to your advantage

It may be tempting to spend those happy financial surprises—like tax refunds, bonuses, credit card or checking account cash back rewards, or that big birthday check from Grandma—on something fun. However, if you weren’t expecting the extra money, why not use it to take a big bite out of your debt? Our members and financial experts alike have found that unexpected windfalls can come in handy when struggling with debt payments.^[4]

5. Negotiate terms with your creditors

It’s in a creditor’s best interest to help borrowers repay the debts they owe. If you’re not happy with your current terms, you may be able to get a lower rate, longer repayment period, or an adjusted monthly payment. Ask your credit card company or lender if there are any options to switch things up.^[5]

6. Get a side hustle

Today’s gig economy offers lots of opportunities to earn extra cash with part-time work that fits into your schedule. Many gig companies, like rideshare and delivery services, let contractors decide when to work—so you can work as much or little as you want. To get started, all you typically need is some free time, a phone, and a car.

If in-person gigs aren’t your cup of tea, consider joining an online freelance network to search virtual side hustles based on your area of expertise. Just remember, a gig job is still a job, so you be sure to set aside some of your earnings to cover taxes.^[4][6]

7. Find a part-time job

A part-time job usually requires a more steady time commitment than gig work, but it may be a good fit if you’re looking for set hours and predictable income. You can choose a part-time job that’s something more fun than your regular job—or maybe even a role that’s a stepping stone into a new career.

If you don’t want to commit to extra work for the entire year, you can look for seasonal positions, like holiday retail sales. With a steady paycheck, you can project exactly how much you’ll earn each week so you’ll know how much you allocate toward debt payments.^[4]

8. Spend wisely

If you want to see how to pay off debt fast, it’s important to closely look at your spending. In addition to budgeting and cutting down on nonessentials, try to take advantage of as many discounts, sales, and promotions as possible. From cyber sales to coupons, finding ways to trim your spending can make a huge difference over time.

However, be careful not to buy things you may not need just because they’re on sale. To benefit the most from your newfound savings, be sure to put any extra cash toward debt payments, not new spending.^[4]

9. Consider short-term rentals and shares

Plenty of services allow you to rent out your home or even your car, RV, or pool. This can be a good option if you’re near a popular tourist destination, live in a city with lots of business travelers, or don’t mind guests in your home. You might also choose to make an investment in something you can rent out, like an in-law apartment, yurt, or camper. Or, if you’re never home or have an extra vehicle you don’t use, short-term rentals and shares can generate passive income on the things you’re not using.

Remember, renting out or sharing your property for a fee is often considered a business. Before getting started, make sure you understand any applicable laws, insurance needs, and tax information. You’ll also need to set aside a portion of your income to cover taxes for your new business venture. If you rent your home, check your lease to see if short-term subletting is allowed, so you don’t unknowingly break your lease.^[6]

10. Get a roommate

If you’re not comfortable hosting strangers, consider sharing living expenses with a friend. With a roommate, you not only split the rent but also share household bills like internet, utilities, and even groceries. Check with your landlord to make sure roommates are allowed. Your new roommate may also need to complete a rental application, depending on your lease.

If you own your home and rent out a room, keep in mind that renting a room out counts as income, so you’ll be on the hook for taxes. It’s also a good idea to check in with your home insurer to make sure your renter is covered.

11. Sell your stuff

Whether you have clothes, furniture, handmade items, or collectibles to sell, there are many simple ways to sell your stuff—from online resale websites and consignment shops to social media marketplaces. If you’re not sure what to sell, start by looking in your closet for unworn clothing that’s in good condition. Or, clean out your garage or basement. If you’re paying for a storage unit, think about cleaning it out and selling (or donating) what you don’t need, so you can save money on the monthly storage fee.^[4]

You may have to pay taxes on anything you sell, so make sure you know what to set aside. However, the rest of the cash can be used to help pay down debt.^[4]

12. Be a cord cutter

It’s easier than ever to give up cable TV. Today, there are many options for watching your favorite shows and movies online—for free. Instead of subscribing to an expensive cable package, you can watch free channels, subscribe to one or two inexpensive platforms, or pay as you go for specific programs. If you’re already using streaming services, think about which subscriptions go unused and cancel them to save even more.^[4]

13. Share your knowledge

Lots of companies will pay you to participate in online or in-person focus groups. This can mean anything from testing products to simply giving your opinions on products and services you’re already using. If you happen to live near a college or university, try enrolling in a paid research study. If you have something to teach, consider building a course and selling it on an online platform.^[4]

Why should you try to pay down debt actively?

If you plan on one day owning a home, retiring early, or taking that big trip you’ve always dreamed of, you’ll need to get your personal finances in order—and that often starts with managing your debt as part of your budget. If you have several high-interest credit cards that you’re not paying the full balance on each month, those fees can quickly multiply. The longer you keep the debt, the more you’ll end up paying in interest over time. Plus, carrying high balances can affect your credit scores, since your utilization rate is a key scoring factor.^[7]

How quickly can you get out of debt?

How quickly you can get out of debt depends on many factors, including how much debt you have, the types of debt you’re carrying, and the amount of cash you can pay toward your debt. Installment loans have set repayment terms, so you’ll know how quickly you can get out of debt if you stick to the payment schedule. For instance, a 15-year mortgage will take 15 years to pay off unless you make additional payments.^[3]

Setting goals can help you figure out the best debt-repayment strategy and timeline. For example, if your goal is to pay off your credit card debt in five years, a five-year debt consolidation loan may be a good choice. Your efforts to pay down debt can also be affected when you take on new debt. While a new car loan might be necessary, it’s often a good idea to curb new charges on credit cards you’ve paid off.^[8]

The bottom line

Paying down debt can help ease financial stress, improve your credit scores, and lower your debt-to-income ratio. You may not be able to pay down your debt overnight—but with the right strategies in place, you can tackle your debt head-on and learn ways to stay on top of your debt in the future. Don’t be afraid to experiment with different ways to pay off your debt or evolve your methods over time.

If you’re in over your head and want to stop collection calls, consider working with a professional, like a credit counselor from an accredited association like the National Foundation for Credit Counseling (NFCC). They can help you put together a debt management plan to tackle some types of debt, such as credit cards, with a single monthly payment.^[9]

Consumer Financial Protection Bureau. “How to reduce your debt.”
Consumer Financial Protection Bureau. “What do I need to know about consolidating my credit card debt?”
Consumer Financial Protection Bureau. “How does paying down a mortgage work?”
Consumer Financial Protection Bureau. “Two ways to save extra money.”
CNBC. “How to lower your credit card interest rate.”
IRS. “Manage taxes for your gig work.”
Consumer Financial Protection Bureau. “Financial well-being: What it means and how to help.”
Consumer Financial Protection Bureau. “Budgeting: How to create a budget and stick with it.”
Consumer Financial Protection Bureau. “What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair?”

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