How to Reduce Your Debt in 5 Years Instead of 30

Have you ever opened the mail and found a bill that created a ball of anxiety in the pit of your stomach? If so, you’re not alone. Whether your debt comes from credit cards, student loans, mortgages, auto loans or a combination of these, it can cause an extreme amount of stress.

The desire to pay off debt early is an alluring proposition, especially when you’re looking at 30 or more years of debt. And believe it or not, you can pay off debt that would normally last 30 years in just five. Sure, it might not be easy, but it’s well worth it.

Are you willing to make the sacrifices necessary to be debt free in five years? If so, here are a few factors to consider.


While it is a drastic change, downsizing your house or cars can be instrumental in paying off your debt early. You could try moving into a smaller home, a less expensive area or a combination of the two, and in doing so, you will have succeeded in lowering your debt and mortgage payments. Plus, the gap left in your budget after the downsize can be put towards other bills, like credit card debt.


With our advice on the $50 a week grocery challenge and the expenses you can eliminate to save, we have devoted multiple articles to budgeting, and there is a serious reason why. It works. A solid budget can help you pay down and pay off your overwhelming debt in less time than you would if you were still splurging on luxuries. (Like a gym membership or coffee shop lattes.) Work out the budget that best fits your lifestyle and stick to it. Remember, it will be difficult in the beginning, but you can do it, and you will be happy you did in the end.

Extra Payments

Making one extra payment every quarter can not only decrease your debt. These extra payments will shorten the amount of time you spend paying and decrease the amount you have to pay back. Let’s say you have a $200,000 30-year mortgage with a 4.5% interest rate. Your monthly payments would be around $1,013. By paying one extra payment each quarter, four times a year, you will save $67,524. Your mortgage repayment will also be shortened by 11 years and five months. While those numbers are amazing, you can’t forget the difficulty involved with this method. It might not be for everyone, but it is worth it for those who are able to implement it into their repayment strategy. If you are considering this, we recommend working with a debt management program to figure out which method fits your budget the best.


Debt consolidation programs offer a proven process of combining your various debts, like numerous credit cards, and offering a lower interest rate to help you pay them off sooner. You will work with a credit counselor to develop a debt management plan, which could include the method discussed above. They will start by taking an in-depth look into your debt and help you prioritize where your money should go. They will also work with creditors on your behalf to help reduce your interest rates and lower your payments. After all of this, they will consolidate your debt into one easy, monthly payment. With this plan, you actually get the lowest monthly payments while still paying off your credit card debt in 5 years instead of 30. The lowered interest can save you tens of thousands of dollars. Plus, most debt management programs will enroll you in credit counseling services, which help you learn to live within your new budget.

Want to learn more about paying off your debt in five years instead of 30? Contact one of our credit counselors today for more information and take the first step in a debt-free direction!


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