The faster you clear your debt, the less interest you’ll pay.
Here are some ways you can how to speed things up.
1. Increase your repayment amounts
If you have a credit card, it’s good to go beyond the minimum repayment and pay off as much as you can each month. Ideally the whole balance if you're able to.
If you have a personal loan, you may be able to negotiate with your lender to increase your repayment amounts.
Look at your budget and see how much you have to spare, even if it’s just an extra £5. Then, see if you can increase the amount you repay the next month. You may want to look at prioritising the debts which have a higher interest rate, and paying these off first. Increasing your repayments by £5 a month may make a big difference over time.
2. Increase your repayment frequency
If you’re making monthly repayments of a set amount, you could look at increasing this to fortnightly. You’ll have more flexibility on a credit card, but may be able to increase your repayment frequency on a personal loan too.
Fortnightly repayments could help you repay debt quicker, without noticing much of a difference to your outgoings.
If you have a credit card, you can divide your usual monthly repayments by two and start paying that amount every 2 weeks instead.
So, if you’re currently paying off £100 per month in 12 instalments, you’ll repay £1,200 over a year. But if you make 26 fortnightly payments of £50, you’ll repay £1,300 over a year.
If you have a personal loan, you could add a standing order to pay a certain amount at the mid-point of the month. This would be on top of your regular monthly repayment. Even a small amount can make a difference. Over the course of a year, £20 extra a month will mean you pay off an additional £240. You may need to check with your loan provider that you’re able to do this.
3. Make overpayments
There may be certain points in the year where you come into money. It could be that you get an unexpected refund, or perhaps you just have some money left over at the end of the month.
If this happens, and you’re able to make overpayments without any charge or penalty, then you could use that spare money to repay your debt.
Keep in mind, there may be a charge to make overpayments on some personal loans, so check the terms and conditions to make sure it’s worthwhile.
You could try a combination of these 3 tips. For example, increasing your monthly repayments on credit card debt from £55 a month to £60 and then paying £30 every two weeks, can help you reduce your debt quicker. If you can afford to, you could then look to make overpayments.
The quicker you repay your overall debt, the more you’ll save yourself in interest payments and the sooner you’ll be free to put your money towards something else.