How to Pay Off Debt Fast in Canada: 5 Things You Can Do

How to Pay Off Debt Fast in Canada: 5 Things You Can Do

Posted on April 13, 2021

Whether you’re paying down debt in advance of a auto loan or want to get control of your finances, there are ways to pay off debts faster than you might otherwise be able to do.

We won’t pretend it’s easy because it isn’t. Paying off debt is a gradual process that demands willpower and determination. But it is possible and it is worth every second you dedicate to doing it.

Here’s a few ways to help pay off debt faster.

Make a budget

Your first step is to create an accurate household budget. List all your income in one column and all your outgoings in another. Add a third column listing all your debts in order of interest rate with the highest at the top.

Now you have an accurate picture of where you are, you can begin doing something about it.

Take control of spending

If you’re ending each month in the red, start making savings. Identify some outgoings you could easily live without and cut them. Keep cutting until you have a cash surplus at the end of the month or you can cut no more without impacting life’s essentials.

Prioritize high interest debt

You know that list of debt in order or highest interest rate? Use that to pay off the most expensive debt first. Interest is lost money so paying off the highest rate means eventually you will be paying more off the amount you owe rather than the interest.

Settle high interest debts first and that should free up more money down the line to pay everything else off.

Consider a consolidation loan

It may seem counterintuitive to suggest borrowing more when asking you to minimize spending but this is different. A consolidation loan is one you take out to pay off all your debts. Rather than paying several debts at once, you pay a single loan.

It’s easier to manage, requires a single monthly payment and will usually be at a lower interest rate than other borrowing.

If you go this route, make sure your loan doesn’t include early repayment penalties as we will eventually want to pay this off early too.

Earn a little extra

If possible, working overtime, working weekends, getting a side job, working as a freelancer in the evenings can all provide a little extra income. It won’t be easy but it could help pay off your debt faster.

Anything you can do to pay down debt is going to be worthwhile even if it doesn’t feel like it at the time!

There are lots of opportunities to earn legal extra income online or in the community. Check online, check Craigslist, check Upwork and other resources to see what you could earn.

As we said at the top, it isn’t easy to pay down debt but it is worthwhile. Whether you‘re lowering your debt to income ratio in advance of a Hannon auto loan or are taking control of a more serious situation, there are the tools and techniques around to help manage your finances.

When you are ready for that auto loan, you know where to come!

We will use all our skill and experience to deliver the lowest possible auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

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