12 Interesting Ways to Pay Off Debt



On the journey to financial freedom, paying off debt cannot be ignored. In fact, some people will call it an emergency. Many people bear the debt burden in the form of credit card debt, student loans, mortgages and others. Although paying off debt can be an uphill task and requires major sacrifices, in some instances it simply requires you to be creative.

Let’s look at 12 ways you can pay off a debt that you probably didn’t realize:

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1. Get Your Credit Report

In order to start paying off your debt, you need to know how much it is. Have you looked at your debts and their respective interest rates lately? A simple way to check your debt is through your credit report. You can access it once every 12 months. And it’s free! Simply go annualcreditreport.com, the official website for credit reports. The credit report is an outline of your credit history. It will show the duration of your debt, your credit score and your debts from different sources. For example, banks, collection companies, credit card companies and the government. It also indicates the interest attached to these debts and the payments you have made.


2. Negotiate For a Lower Credit Card Interest Rate

Credit card companies are not as rigid as many users might think. Depending on your circumstances, they can waive your annual fee, reduce your interest rate or increase your credit limit. All you have to do is ask. A survey done by creditcards.com revealed that almost 85% of credit card users who have made such requests have succeeded. Few cardholders make these requests.

To negotiate a lower interest rate, you should be reasonable. Asking for a reduction from 34% to 14% is unrealistic. Find a realistic interest rate using offers you receive from different companies but it must be reasonable. Also, if you have not been consistent with making payments in time, credit card issuers will not be inclined to grant your request.

If you have been a long time customer, emphasize your loyalty when making your case. Maintain a polite tone even if the company representative gives you a negative response. You can ask to speak to their superior who is in a better position to make decisions on interest rates.


3. Search for Unclaimed Money

Several millions of dollars are sitting in forgotten bank accounts, abandoned pensions, uncashed checks and unclaimed insurance waiting for their rightful owners to claim them. By mid-2016, $41 billion was sitting in unclaimed funds.

You might be wondering how so much money can be unclaimed. Well, sometimes checks are undeliverable when a person moves to a new home. You may switch bank accounts when moving out of state, unknowingly leaving your old account with a positive balance that gains interest. You might also be a beneficiary of a life insurance policy or an inheritance and not know it.

The National Association of Unclaimed Property Administrators (NAUPA) is the top authority on unclaimed property. NAUPA ensures that unclaimed money is returned to their legal owners instead of sitting in banks, credit unions, the government and other institutions. Start your free governmental search by going to MissingMoney.com. Some of these billions of dollars could be yours.

4. Get a Lower Interest Rate on Your Student Loans

You can lower the interest rate on your student loan by refinancing. Student loan refinancing involves getting a new loan with better interest rates and using it to pay off your student loan. Several lenders are offering this to private and federal students. The competition in the market has enabled students to get good rates.

The increased number of nation21loans lenders could make it difficult for you to decide. Approaching each lender individually to find out their rates is a time-consuming process. Instead, you can simply go to Credible. Their site lists the different lenders with their interest rates and loan terms.


5. Sell Your Used Items

Selling your used stuff is a great way to pay off debt. They could be clothes, electronics, furniture, etc. You most likely have stuff lying around in your house that you no longer use. You might even have stuff you bought over a year ago and have never unwrapped.

Go through each room in your house and dig out those items. Sort your items in three categories. What you need, what you will donate and what you will sell. Set a date and time for a yard sale and put a few ads on Facebook and your local grocery store. If you live in an apartment or your outdoor space is limited, you can take eye-catching photos of the items and sell them online through eBay or Craigslist.


6. Live on One Income

Another great way to pay off debt, especially if you live with a spouse is living on one income and using the other to pay off the debt. This is most ideal for newlyweds. You will need to make several temporary sacrifices. For example, eating out several days a week or buying an expensive car, until you have paid off your debt. Create a budget and stick to it. Focus on living simply and exercise frugality during this time. It will be difficult and tempting at times. Especially when your family and friends are spending money on whatever they please. Keep your end goal in mind. Motivate yourselves with a list of rewards you will enjoy after paying off all your debt.


7. Relocate to a Different State

You might have a reasonable salary but find it hard to pay off debts. This might be because you live in a state with a high cost of living. San Francisco’s living wage is a staggering $81,795 and in California, it’s $68,190. High housing costs, expensive childcare and heavy taxes leave many residents with a few dollars at the end of the month. Moving to a more affordable city or state would leave more money on your bank account to comfortably pay off debt. You won’t have to survive on ramen noodles every day. According to living wage data from MIT, Mississippi is ranked as the cheapest state with a living wage of $48,537, childcare costs $2,869 and housing is $9,009. Others include Tennessee, Kentucky and Ohio.

8. Stop Using Credit Cards

Some people will argue that credit cards have benefits like cash backs, points and air miles but these only apply if you’re using your card responsibly. If you frequently have balances on your card, you end up paying high interest and losing more money.

If you’re drowning in debt, it may be best to stop using your credit card. You can either lock them up or deactivate them. Keep in mind that deactivating your card will negatively impact your credit score. But you would rather have a temporary credit obstacle than insurmountable debt and the stress that comes with it.

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9. Use Your Tax Refund Check

Instead of using your tax refund check to buy that 52” television you’ve always wanted, it’s a wise idea to put it towards your debt. The rewards of reducing your debt far outweigh the temporary gratification from that expensive purchase.


10. Cash in Your Life Insurance

Rather than drown in debt, you may consider cashing in your life insurance. This is applicable if you have a whole life policy with some cash value and not a term life insurance policy. If you don’t have a spouse or children who would benefit from your life nsurance, you can cash all of it. If you have beneficiaries, you could use part of it. Extensively research before considering this option.

11. Statute of Limitations Law

In some states, debt collectors aren’t allowed to collect particular types of debt after a certain duration. Other states restrict creditors from suing after a certain period. It could be 7-10 years or even older. If you’re going through tough financial times and can’t pay old debts, focus on your current debts instead. Get in touch with the Attorney General of your state for information and guidance concerning the statute of limitations in your state.

12. Use Your Cash Reserves

It’s a comforting feeling to have savings in the bank just in case of anything. Considering the current low interest rates on savings accounts, that money is not doing much for you in the bank. You can use part of your savings to pay off some debts and reduce the accruing interest.



We hope the above methods will inspire you to start paying off your debt. Whether your debt is much or little, there is a solution for you. The thought of debt creates stress and anxiety for many people. Paying off your debt doesn’t have to be a dreadful experience, but it should not be ignored. Start acting now, keeping in mind that someday you will not only be completely debt-free but also stress-free.