Debt management – Ways to repay high interest debt faster

Effective debt management is key towards your financial independence journey!

The first goal in the FILIP formula is to pay back in full all high interest debt such as credit card or personal loan debt. 

Repay high interest debt faster

There are some easy, quick ways in which you can reduce and pay back faster any existing debt.

1. Review your monthly income and expenses and ensure you get to a surplus/saving position. The key to financial literacy, financial freedom and ultimately financial independence is to build good financial habits, live below your means and therefore be able to save a percentage of your monthly income each month.
2. Negotiate your current interest rate with your lenders.
3. Move your current debt balance to lower or zero interest rate credit. If you have a mortgage you could consider re-mortgaging, borrow slightly more on your mortgage and use that extra money to repay high interest debt such as credit cards and personal loans.
4. Consolidate your debts with one or maximum two lenders. This will allow you to better track your outstanding debt.
5. Get financial advice on how you can restructure your existing debt balances – Experts, charities and organizations can assist you, many times without charging you, especially if you are in financial difficulty.
6. Set up automated payments in order to avoid late fees or higher interest charges.
7. Pay more than the minimum balance in your credit cards, personal loans or car loan.
8. Cut your credit cards. You can keep one credit card if there are good perks that come with it but you should get rid off all your other credit cards in order to avoid spending again on these after you repaid them.
9. Start repaying the highest interest rate debt first. This will allow you to pay less interest charges right from the start and help you repay your debt faster.