7 Simple Strategies to Pay Off Debt

In Indiana, the average resident with a credit score had about $48,000 in household debt in 2024. This included mortgages and student loans[1]. 

If you’ve got debt, you’re not alone. But that doesn’t mean it won’t feel stressful. You may have bills, loans, and credit cards that weigh on you. The good news is that you can take steps to pay your accounts down. 

When you have a plan, it can help you pay off debt and reach your goals faster. Below are simple strategies to help you get started.

Effective Strategies To Pay Off Debt

There are several ways to pay off debt. Some plans help you save money on interest. Others help you stay motivated with quick wins. The steps below can help guide you and give you a clear path forward, and potentially help you become debt-free. Pick the method that fits your budget and your goals.

1. Snowball Method

The snowball method is a simple plan. You list your debts from the smallest balance to the largest. You always pay the minimum amount on every debt. Then, you place extra money toward the smallest one first. When that debt is gone, move on to the next smallest. 

You build momentum like a snowball rolling downhill. This plan feels good because you see wins fast. It can boost motivation and help you stay on track.

2. Debt Avalanche

The debt avalanche method works in reverse of the snowball method. You still pay the minimum on all debts. But, instead of paying the smallest balance first, you target the debt with the highest interest rate.

Over time, this method can save you more money overall because interest costs more. But it may take longer to see results. Some people use the avalanche because saving money matters most.

3. Round Up Payments

Rounding up payments is a simple trick that can help you pay off debt faster. Instead of paying the exact amount, round up to the next $10 or $25. Over time, this extra money lowers your balance sooner. It can also reduce interest costs. 

You may not notice the small amount each month, but the long-term payoff can be helpful.

4. Debt Consolidation

Debt consolidation combines several debts into one loan. This can make payments easier and may offer a lower interest rate. It can also help you remember due dates. You may be able to use a personal loan from a bank. 

Before you apply, compare interest rates, loan terms, and fees. Our debt consolidation calculator can show you how your monthly interest could be reduced. Only consolidate if the new loan costs less than what you pay now or you can afford the higher payment.

5. Balance Transfer Offers

Some credit cards offer low or zero rates for a short time, called a promotional period. This is typically only available when you are first approved for a new account. You can move other credit card balances to the new card during the promotional period to save money. 

This tactic only works if you can pay off the total balance before the offer expires. Otherwise, your debt will accrue higher interest. With this strategy, watch out for transfer fees. And, be sure to read the terms carefully. Most importantly, avoid using the new card for purchases while you pay down the balance.

6. Loan Refinancing

You may be able to refinance loans like a mortgage, student loan, or auto loan. In some cases, refinancing can lower your monthly payment or interest rate. In this case, you may be able to use the new loan to pay off other debts as well. 

Be sure to check the full cost before you sign. Our loan balance calculator can be handy for this. Longer terms can lower payments, but you may pay more total interest in the long run. Always compare options and ask questions.

7. Use a Budget

A budget can show where your money goes each month. With the right budget, you may find ways to cut small expenses to make extra room for debt payments. 

For example, you can try the 50/30/20 rule. With this rule, you spend 50% of your income on needs, 30% on wants, and 20% on debt repayment (or savings). A rule like this can work well, especially when your income and expenses are predictable. 

A budget may not work for everyone. It can be harder to stick to a debt repayment budget when your income and expenses change often. 

You might also like: How To Start Saving with Small Deposits 

More Tips for Paying Off Your Debt

You can use the above strategies along with other tactics, too.

For example, consider the following:

• Increase income through overtime, a part-time job, or a side gig.

• Sell items you no longer use.

• Cancel unused subscriptions or memberships.

• Make payments automatic to avoid late fees.

• Build an emergency fund. 

Over time, smart money habits can help you work down your debt and build a bright financial future. 

Recommended: The 6 Best Ways to Get Out of Credit Card Debt 

Pay Off Debt With Centier By Your Side

Paying off debt takes time, but small, consistent steps can make a big difference. Try one method or mix a few. Build an emergency fund to help cover surprise charges. As you lower your debt, you free up money for long-term goals. Your first step may be using a calculator, building a savings plan, or speaking with a banker.

Do you want guidance on paying off debt, savings tools, or financial planning? Book an appointment with a Centier banker today.

Frequently Asked Questions

What Is the Easiest Way to Pay Off Debt?

The answer depends on your goals. Some people like the snowball method because it feels simple. Others choose the avalanche because it saves money on interest. The easiest plan is the one that fits your habits. Pick a plan you can stick to.

What Is a Trick People Use to Pay Off Debt?

A trick many people use is to set up automatic payments. When money moves out on its own, you may be less tempted to spend it. You can also schedule an extra automatic payment each month, even if it is small. Steady progress can help lower your balance faster. 

How Do I Pay Off Debt if I Live Paycheck to Paycheck?

Start small. Cut one expense at a time. Try to cut monthly costs by $10, then $20. Place that extra toward debt. Track spending daily. Look for free community resources. You might also want to talk to a banking professional. They may be able to help you review interest rates, credit scores, and monthly bills.

Source: 

[1] https://usafacts.org/answers/how-much-debt-does-the-average-american-owe/state/indiana/