13 Best Creative Ways to Pay Off Debt

8 min read
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Nobody likes holding onto credit card, medical, car loan, or student loan debt. So it’s not surprising that we frequently hear from LendingClub members about the many ways they’ve learned how to pay off debt faster. Although everyone’s situation is different, most of our members have found that choosing the right repayment plan, getting a side hustle, reducing spending on non-essentials, and finding creative ways to increase one’s income are the best methods for quickly reducing debt and improving their financial situation.

Why You Should Prioritize Paying Off Your Debt Fast

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 consolidating your debt.

You may be thinking, “Those plans are a long way off. What’s the rush?” One of the issues is that debt can lower your credit score, making you less likely to qualify for loans in the future—like a mortgage. Another issue is high interest rates. If you have several high-interest credit cards that you’re not paying the full balance on each month, those fees can quickly multiply. And the longer you keep those debts to credit card companies open, the more you’ll end up paying in interest over time. Both of these are excellent reasons to start taking steps to become debt-free.

To help you get started, we’ve rounded up some of the best ways to pay off debt and the most frequently mentioned methods our members have used in the past. We’ve also included some important tips and strategies from financial experts to help you succeed and become debt-free faster.

1. Pick a debt repayment plan that suits you.

Although there are many ways to manage debt, our members often note using two common methods: the debt snowball method and the debt avalanche method.

Debt snowball method

You pay as much as you can each month toward your smallest debt, paying only the minimum due on your other debts. Then, you move on to the next smallest balance, and so on, until you work your way up to your largest.

Debt avalanche method

You begin by paying your debts with the highest interest rates first, paying only the minimum on your other debts, then moving on to the next highest, and so on.

Both debt payoff methods have their advantages and disadvantages. If you have a small amount of debt, the snowball method is a good way to get started and stay motivated because you’ll see small wins quickly. On the other hand, 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—often hundreds of dollars in interest.

2. Consider a balance transfer.

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 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 for transferring balances and, if approved, you’ll need to pay off the debt you transferred before the intro APR period has ended if you’re trying to avoid interest rates.

Many of our members have benefited from LendingClub Bank’s balance transfer loans, which are debt consolidation loans and, therefore, very different from balance transfer credit cards. Balance transfer loans allow you to consolidate high-interest rate debt and pay off your credit card debt with one low monthly payment at a fixed rate and term.

3. Use financial windfalls to your advantage.

It’s tempting to spend those happy surprises—tax refunds, bonuses, that big Christmas check from grandma—on something fun. But 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. “There’s nothing wrong with treating yourself after receiving a year-end bonus or inheritance from a loved one, but the bulk of that money should be put to good use,” says personal finance writer Zina Kumok. “Every windfall is an opportunity to take a step toward your goals.”

4. Negotiate a lower interest rate.

It may sound surprising, but it’s in a creditor’s best interest to help cardholders repay the debts they owe. If you’re making a sincere effort and have ample reason to ask for a lower interest rate or longer repayment periods, don’t be afraid to reach out to your creditors. A better deal can make all the difference.

5. Join the gig economy.

Many of our members earn extra cash by doing part-time work whenever it fits into their schedules. Companies like Lyft, TaskRabbit, and Instacart let contractors work when they’re able, and in most cases all you need is a phone and a car. If in-person services aren’t your cup of tea, sites like Upwork and Fivrr allow you to filter through online gigs based on your area of expertise. Whatever extra income you make, use it to pay down debt.

But be smart. Consider whether you have to take on any new expenses that will negatively affect your credit score. For example, as a Lyft driver, you might need to upgrade your car. And remember that in most cases, you’d be an independent contractor. So be sure to keep up with your budgeting and set aside whatever amount of money you may need to cover your taxes.

6. Get savvy about specials and deals.

If you want to see how to pay off debt fast, it’s important to closely look at every aspect of your finances, including your spending. In addition to budgeting and cutting down on non-essentials, make sure to take advantage of as many discounts, sales, and promotions as possible. From cyber sales to coupons, our members have found that taking advantage of deals can make a huge difference over time.

7. Find a part-time job.

Some members value predictability over flexibility and have taken on part-time jobs in addition to their full-time job. A part-time job can be something more fun than what you do in your regular job or a stepping stone to a new career. With a steady paycheck, you can project exactly how much you’ll earn each week, which can help you budget for paying off your debt, and maybe even leave something for the savings account.

8. Rent out a room with Airbnb.

Members who live near popular tourist destinations or live in a city with lots of business travelers are putting their extra bedrooms, garages, granny units, and converted sheds to work for them. There are many ways to earn extra income by renting out your space on Airbnb, Homeaway, VRBO, Flipkey, or other alternative travel accommodation sites. If you’re organized, have a desirable space, and enjoy meeting new people, you may be able to earn a significant monthly income.

Some money-wise members are even renting out their apartments and homes while they’re on vacation or visiting friends and family out of town. Either way, the money you make while you’re away can help you avoid accumulating more debt or pay down debt faster.

9. Get a roommate.

If you’re not comfortable hosting strangers, many of our members are sharing expenses with a friend. With a roommate, you not only split the rent but share household bills as well. Besides money-saving and having someone to come home to at the end of the day, there are many advantages to having a roommate.

10. Get a better handle on your bank accounts.

Our members know (and you do, too) how quickly bank fees can add up. Look for a no-fee checking account that also helps you minimize or avoid ATM fees. Many banks waive the monthly service fee if you keep a minimum balance or set up a direct deposit. As always, try to take steps to ensure you don’t incur costly overdraft fees. For example, keep a buffer amount in your account, and confirm you have overdraft protection on your debit card. Once you get a handle on it, start redirecting the money you’ve been spending on bank fees toward your balances.

11. Clean out your garage and sell items on Craigslist.

Most of us have outgrown something that somebody else might pay good money for. Clothes that don’t fit. Athletic gear with price tags on. Furniture that doesn’t match the new decor. Lots of our members tell us they’ve started listing their stuff on Craigslist or Facebook Marketplace and pocketing the extra cash for their emergency fund. And if you’re paying for a storage unit, you can also save money by cleaning it out, selling (or donating) what you don’t need, and losing the monthly storage charge.

12. Be a cord cutter.

It’s easier than ever to give up cable TV. Today, there are many options for watching TV 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.

13. Share your knowledge.

Lots of companies will pay you to participate in in-person or online focus groups. This can mean anything from testing products to simply giving your opinions on products and services you’re already using. Many members tell us they’re earning $100 or more for just an hour or two of their time. And if you happen to live near a college or university, try enrolling in a research study. You could even earn as much as $5,000 for tests that require you to stay overnight or return for a follow up.

The Bottom Line

When it comes to learning how to pay off debt faster, our members have found success by being both strategic and creative. It’s not just about managing your income wisely and cutting back on spending—it’s also about trying something new and making the most of your location, smarts and skills. The things you do that get you closer to paying off your balances or paying off a personal loan early could bring new skills, new friends, and, potentially, a new ongoing source of income.


How to Pay Off Debt Fast FAQ

How can I pay off debt with no money?

You can begin to pay off debt by first setting a budget that you can stick to. List out all of your current expenses and begin to eliminate the non-essentials. Next, avoid getting into more debt or spending money that is not yours. Then, find creative ways to make more money to pay off any existing debt, like the ones listed in this article.

How to pay off debt fast?

There are several ways to pay off your debt fast, although how quickly you can do so will depend on a number of factors, including your income, expenses, and how much debt you have:

  1. Choose a tried and true repayment strategy like the snowball or debt avalanche method.

  2. Consolidate debt.

  3. Make larger, more frequent payments to your lenders and creditors than the standard, once-a-month minimum payment that’s required.

  4. Renegotiate your interest rates.

  5. Transfer your balances to a 0% APR credit card or take out a balance transfer loan.

  6. Supplement your income with a side gig or second job.

Find a method that works for you—or a combination— and stick to it to pay off debt quickly.

How do I pay off debt with high interest rates?

If you have a lot of high-interest-rate debt, your best bet may be to use the debt avalanche payment method. With this method, you pay your debts with the highest interest rates first, paying only the minimum on your other debts, then moving on to the next highest, and so on. Though this method requires discipline, it’s the fastest way to start chipping away at those interest charges, which will only grow over time. You can also make an effort to pay more than the monthly minimums on your credit accounts and pay more than once a month, if possible.

When should I seek help with my debt?

If your debt is too substantial for the above repayment methods to be viable, you still have options. You can try credit counseling, wherein a professional financial advisor works with you to help you manage your debt. You can use a Debt Management Plan (DMP), which requires you to make a monthly deposit to the plan that’s then distributed to your creditors until all the debts are repaid. Or, you can contact a third-party debt settlement company that will negotiate with your creditors to allow you to pay off your debts for lower amounts. Debt settlement companies charge a fee, so make sure you do your research and find a reputable organization.

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