Knowing what you owe and where you owe it is only the first step of tackling debt. But now comes the big question: how do you actually pay all of it off? Not all bills are the same. A credit card bill, a student loan and a medical bill each come with different rules, costs and strategies to tackle them.
We’re going to dig in by debt type, giving you clear, simple strategies to pay them off faster with less stress — and more confidence.
Credit Card Debt: High Interest, High Priority
Few things can be simpler than racking up credit card debt. The hard part is paying it off: And with the high interest common in the marketplace today, you could find yourself battling against rates of 20% or more as you pay down your debt. If you only make minimum payments, your balance shrinks very slowly while interest keeps growing. That’s why it’s one of the most expensive types of debt.
Two Smart DIY Strategies to Pay Off Credit Card Debt
- The Debt Avalanche
This method is popular for a reason: it’s effective at undercutting the money-drain that is high credit card interest rates. Here are the basics:
- List all your cards and their interest rates.
- Keep paying the minimum on all your cards.
- Take any extra money and put it toward the card with the highest interest rate.
- Debt Snowball
The Snowball Method focuses on easy wins first to help you build momentum. Here’s how to do it:
- List all your cards and the amount you owe.
- Keep paying the minimum on all cards.
- Put all extra money toward the smallest balance first.
Bonus Tip: Call Your Creditors
Calling your credit card company to negotiate a lower rate can be a powerful method to slow building debt. However, proceed with caution: Creditors may deny your request or reduce your rate only after several calls. So if you have the time, patience and willpower, this approach might be worth a shot.
Student Loans: Know the Type, Know the Options
There are two main types of student loans: Federal and Private. Given by the government, Federal Student Loans have more flexible rules and repayment policies. Private loans, on the other hand, tend to have fewer repayment choices and stricter terms.
Federal Student Loan Payment Plans That Make Life Easier
Income-Driven Repayment (IDR)
Income-driven repayment plans factor in your actual earnings to determine your student loan payment. So if you’re un- or under-employed, an income-driven repayment plan can introduce instant financial flexibility on a tight budget.
PSLF and Other Loan Forgiveness Programs
Some public service jobs — like teaching, nursing or social work — may qualify for loan forgiveness. That means part of your loan could be erased if you work in that job for a certain number of years. But it’s worth mentioning that these programs can be difficult to navigate — it’s a good idea to do your research and ensure you’re filing the correct paperwork before you make other long-term financial plans.
For Private Loans: Refinancing for Lower Interest Rates
If your credit score is solid, you might be able to refinance your student loans. That means you take out a new loan with a lower interest rate to replace your old one. This can lower your monthly payments or help you pay off the loan faster.
Medical Bills: Don’t Just Pay—Ask Questions First
A staggering number of medical bills have inaccuracies: A 2016 survey from a hospital trade publication estimated that nearly 80% of medical bills have some form of inaccuracy. If something doesn’t look right, be sure to reach out to your provider and ask for an itemized bill.
Common Errors in Medical Bills
- Charges for services you didn’t receive
- Duplicate charges
- Incorrect insurance processing
Negotiate the Total
It’s always a good idea to call in and negotiate medical bills. Hospitals would usually rather work with you than send the bill to collections. Ask your provider if they offer:
- A discount for paying in full
- An interest-free payment plan
- A charity care program (for lower-income patients)
Find a Patient Advocate
If you feel overwhelmed, a patient advocate or billing specialist can help review your bills and speak to hospitals on your behalf. Some nonprofit groups even offer this service for free!
Car Loans and Mortgages: Shrink Them with Smart Payments
Although car notes and mortgages typically have much, much lower interest rates than credit cards, debt payoff methods for all three are very similar.
Overpay Your Bills
Even paying $25–$50 more each month on your car loan or mortgage can make a big difference over time. That extra amount usually goes straight to the principal — the amount you originally borrowed — and not the interest. That means less interest over time and a faster path to being debt-free.
Try Bi-Weekly Payments
Instead of paying your loan once a month, split your monthly payment in half and pay every two weeks. (Just check that your lender allows it first!) This hack works surprisingly well because:
- You end up making 26 half-payments per year, vs. 12 full payments.
- That’s one extra full payment a year without feeling like a huge lift.
- You’ll pay off your loan faster and save on interest.
Debt Consolidation is the Smart Solution for Unsecured Debt
If you’ve tried these methods and still can’t catch a break, then debt consolidation is a solid option. It’s the simple way to collect all your eligible unsecured debts —like credit card bills and personal loans — into one, affordable monthly payment.
How It Helps:
- You could save 40% or more on your eligible monthly payment by starting a debt consolidation program
- Our structured program can help you become debt-free in as little as 24 – 48 months.
- Regain instant financial flexibility and get support from people who support your journey.
Pursuing financial freedom is a major step in the right direction. So if you need help going the distance, call us — we’re here to help.