Household debts are debts which are carried by the people and not by business or governments.  Household debt is measured by combining the debt of each person in a family. It includes debt like house mortgages, home equity loans, car loans, student loans, credit cards, personal loans, etc. People are frequently using credit cards for their daily shopping, students are taking loans for their higher studies, professional are using home loans, personal loan, etc. to meet their need of luxuries. Carrying household debt has become a kind of worldwide culture and it is growing significantly worldwide especially in developed countries. To get out of household debt is not an easy task. In this article I am going to reveal 10 easy ways to pays off household debt.

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1. Start the habit of saving

First and most important point if we want to pay off our debt fast is to start the habit of saving. Once you started getting a salary, you become habituated of spending money that you forget your limit of expense until it starts providing pain to you. You started thinking that you are becoming wealthier as you are getting a salary and it will enhance with experience. Sorry dude! You have just started living high instead of becoming wealthier. Rates of the increments in income are much lower than rates of the increments of expense, and you started falling in debt trap. So, it is uttermost important to save some percentage of your income.

2. Cut your painless expenses by proper planning

     Make a financial statement of expenses for each month and find out where you can minimize your expense without affecting your necessities of living. It may be somewhere in weekend party expense, movies expense, expense over junk food, tobacco, smoking, and some other unnecessary stuff. Don’t get me wrong here. I am not saying you should not spend on entertainment. But, it should be not like that you are struggling with your loan EMI (equated monthly installment) and every evening you are going to a casino with your credit card to get out of the hangover of debt. Trust me; you will be able to find out some sort of expense, which you will willingly like to cut down and save something.

3. Pay much more than EMI

This is the most common misconception. People think that they have to pay only the amount of EMI each month. You are going to pay much more than required if you do so. For example, if you have taken a home loan of Rs. 5000000 at interest of 9% and if your loan tenure is 240 months, then you will get the EMI of nearly Rs 44986. Paying only EMI you have to pay nearly Rs 5796711 as interest only and total payable amount will be nearly Rs. 10796711. While if you pay Rs 50713 each month, total payable amount will be nearly Rs 9128399. So paying only near Rs 5727 more in each month you have to pay less nearly Rs 1668312. 

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4. Strategy to deal with multiples loans with different interest rates

If you have multiple loans with different interest rates, It is recommended to first pay loan of highest interest rate or loan having comparatively lower interest rate while principal amount is much high. Your main aim is to pay less interest. So, sometime low interest rate with higher amount cost more interest than high interest rate with low principal amount. Simply, first close the loan which is accumulating more interest amount per month. This method of paying loans is called Avalanche method. However, sometime we started getting de-motivated while paying loan. In such a case it is recommended to pay loan with less principal amount and low interest rate first. It will keep you motivated and confident saving more and pay more. Else, sometime de-motivation may lead you to depression and increase your medical expense. This method of paying loans is called Snowball method.    

5. Minimize the use of a credit card

I recommend to stops using a credit card especially if you are not aware of rules and regulations. Also, who are aware of the rule and regulation of using credit card, I recommend to use only that much amount which you can pay within their due date. I am saying this because the interest rate of a credit card is tremendously high in comparison to all other loans. Credit card interest varies from 15% to 42% in India, which is much higher than other loans interest rate. Also, credit card debt is growing at an alarming rate. As per data of RBI(Reserve Bank of India), credit card outstanding amount in India more than doubled, from Rs 30000 crores in March 2015 to Rs 690 billion in March 2018.

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6. Take advantage of balance transfer and negotiating the interest rate

This method should be used with special warning else it may lead you to more debt. As per Trent Hamm, founder of, if you have a high interest card with a balance that you’re confident you can pay in few months, he recommends to transfer the debt to card that offer zero-interest balance transfer. You have to pay off the debt before balance transfer expires, or else you’re often hit with a much higher interest. He says, “If you do it carefully, you can save hundreds on interest this way.”

Sometimes you can also negotiate with the credit card service provider to lower your credit card interest rate else you will transfer your credit card debt to some other lower interest rate credit card. This can sometimes save you from paying a big amount of debt in very less time.

7. Put incentives or bonus to you toward debt

Any extra income (bonus or incentives) apart from your salary is of great help to pay off your debt. It is not a wise idea to invest it on buying luxuries or planning for holidays, neglecting the financial situation. Always remember each small effort to pay off your debt can improve your financial situation.

8. Supplement your income apart from a salary

You can add your income through freelancing, blogging, web designing, YouTube tutorial and many other internets based business during you weekend or free time. This will be of great help to pays off your debt quickly. It is recommended to look all possible legal ways to supplement your income. Simply use your talent, passion and ability to add your income. Try to give a financial touch to everything you are good at or you passionate about. For example- If you love to go to gym regularly and have a good knowledge of gym, you can supplement your income through your YouTube tutorial on fitness or you can also work as a part time gym trainer at any gym institute during your weekends.

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9. Sale the useless household items

There is nothing embarrassing in looking all possible legal ways to generate some little cash to repay your debt soon. Sometime you can get those cash through your household items which are useless. Just sell them and put them toward debt.

10. Keep yourself motivated while paying your debt

Hey! Come on. Debt is not any imprisonment. Take it easy. Never get de-motivated during debt payment. I have already given you a tip for keep yourself motivated during paying off your debt that is Snowball method. Pay off your smallest debt first whenever you feel de-motivated. It will make you feel more confident and relaxed. It makes you continue paying your debt. You can also have some little celebration or plan a trip in between to keep yourself motivated.

Please provide your feedback about the article. You can also share your strategies to pay off your debt in below comment box. Please like and share the article to the peoples whom you find it suitable.

Hey! I will be back soon with my next powerful article about “Cash flow is the king of Financial Intelligence – a basic concept for beginners.”

Published by Rajesh Kumar

Hello! I am Rajesh Kumar. I am an engineer by choice and a writer by passion. I love to analyse different financial situations and express my views on them.

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