Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

When it comes to debt, it’s always in your best interest to get a jumpstart at paying it off. Especially,  if you want to avoid being in debt for years to come. Easier said than done, we know. 

While some borrowers only have to deal with a moderate credit card bill every month, many are currently trying to pay off thousands of dollars in high-interest debt, car loans, and mortgages. 

How To Pay Off Debt Faster

There are many different strategies and tools to help you pay off your debt, but these are ways to help you pay it off faster.

Strategic Methods: Should You Pay Off The Highest Debt First Or The Debt With The Highest Interest Rate?

There are certain debt repayment methods that are designed to help you eliminate all your debt in a timely fashion. Specifically the snowball and avalanche methods. While one focuses on paying off the highest debt level first, the other focuses on paying off the debt with the highest interest rate first.

Snowball Method 

The snowball method is a debt repayment strategy that involves first paying off your smallest balances. The concept is to focus on debts that can be paid off the fastest. This will, hopefully, get you motivated and provide momentum to repay all your debt. For all other debts, you’ll make the minimum payment amount every billing cycle to ensure you don’t fall behind.

The money that you otherwise would have used to pay that first credit product is now available to put toward the next lowest-balance debt. Continue this cycle until all your debt has been eliminated.

Avalanche Method 

The avalanche method focuses on paying the highest-rate debt first. The idea here is to help you save on interest payments. 

Once the higher-interest debt is paid down, you can then use that money toward the account with the next highest rate. The process continues until all your debt is repaid.

Pay More Than The Minimum

When you have a lot of debt spread across multiple cards, just keeping up with the minimum payments can be tempting. After all, at least you would be avoiding a penalty-free, right? This is a bad idea. While you might not notice it at first, the interest that accumulates with every unpaid amount can add up to way more than you anticipated. 

As such, paying more than the minimum payment is important when trying to pay off your debt fast.

How Long Would It Take To Pay Off Debt With Minimum Payment?

If you have a credit card with a balance of $2,000, how long would it take you to pay off versus making regular payments above the minimum? Here’s an example:

Minimum Payments OnlyRegular Payments Over The Minimum
Credit Card Balance$2,000$2,000
Interest Rate20.99%20.99%
Payment Amount$10 or 3% (whichever is greater)*$150
Time It’ll Take You To Pay Off16 years and 1 month1 year 4 months
Total Interest You’ll Pay$2,501.82$297.44
Total Paid$4,501.82$2,297.44

Get A Debt Consolidation Loan

If you have accumulated a lot of high-interest debt, then a debt consolidation loan is a good solution. When you have multiple debts to keep track of, it can cause you to miss payments, which can worsen your debt issues and may even affect your credit scores. 

With a debt consolidation loan, your lender would grant you one big loan to pay off all your smaller ones. You can then pay back the loan through single monthly installments, making it easier to manage. The goal is also to qualify for a loan with a lower interest rate to help lower the total interest you owe. This in turn can help ensure more of your payment goes toward the principal, leaving you debt-free faster. 

Use Your Home Equity

If you’re a homeowner, you may be able to tap into your home equity and take out a home equity line of credit or a home equity loan. These are loans that are secured against the equity in your home. They are good options for consolidating debt because they often have very low interest rates. You can then take advantage of these rates and consolidate your high-interest debt, which will allow you to pay off your debt faster. 

Try A Balance Transfer

A credit card balance transfer involves moving your balance from one account to another with a low or 0% interest rate. The principal amount will not change, but you’ll be able to save a lot of money in interest thanks to the much lower rate. As such, you’ll be able to repay your debt faster, since more money will eventually go toward repaying your principal and less toward interest.

Keep in mind that the low or 0% introductory interest rate on your new credit card is only temporary. These introductory periods usually last anywhere from six to 18 months. If you don’t repay your balance by the end of the introductory period, you’ll begin paying the regular interest rate on the card, which could be over 20%. 

As such, it’s best to transfer your balance only if you think you’ll be able to pay down your entire balance within the introductory period. That way you can take advantage of zero or low interest, which can save you a ton of money. Otherwise, it may not be worth the effort.  

Refinance Your Car Loan

If your credit score has improved since you originally took out your car loan, you may now be able to secure a lower interest rate. If so, consider refinancing your car loan. By refinancing at a lower interest rate, you can save a lot of money in interest and repay your debt faster.

Alternatively, you can refinance your car loan to shorten the loan term. While your regular payments may be higher, you can repay the loan much faster and save a lot of money in interest. 

If refinancing your car loan sounds appealing, then consider using SafeLend to facilitate the process. SafeLend is an online lending platform that provides car loan refinancing solutions to help consumers reduce their loan amounts by lowering their rates without having to trade in their cars. 

Consider Selling Your Car If You Have Multiple

If you can part with your vehicle or have more than one, consider selling it. Liquidating your vehicle will bring in a large sum of money that you can use to pay down your debt.

Unique Ways To Cut Costs And Put It Towards Your Debt

Food Banks

If you’re really struggling with your finances to the point that you can’t afford groceries, consider getting help from one of the many food banks around you. A quick online search will help you find a food bank near you.

Another way to help with the grocery bill is to take advantage of the new grocery rebate. As part of the 2023 federal budget, the grocery rebate provides a one-time lump sum payment to eligible low-income Canadians. 

Couples with two children may be eligible for up to $467, and single Canadians with no children may be eligible for up to $234. Seniors may qualify for up to $225.

Rent Assistance

Government-run rent assistance programs are available to help low-income renters avoid eviction if they’re unable to pay their rent. Check out the following rent assistance programs in the following provinces:

  • Quebec. The Low-Rental Housing Program in Quebec helps keep rent at an affordable level for low-income earners by allowing renters to pay rent equal to 25% of their income. Participants in the program are chosen based on their income and housing conditions.
  • Ontario. The Canada Ontario Housing Benefit (COHB) program helps eligible participants with rental costs for housing anywhere in Ontario. The COHB covers the difference between the average market rent in the area and 30% of a person’s household’s income.
  • BC. The Rental Assistance Program provides qualifying low-income families with monthly financial assistance to help cover their monthly rent. Payout amounts depend on location and size of the family.
  • Alberta. The Rent Supplement Program in Alberta offers a subsidy to help keep rent affordable for those who are struggling to keep up with rising rents.

Use Free Stuff

Buying furniture, school supplies, and other items needed for everyday life can be incredibly expensive. Fortunately, there are ways to get your hands on these pricey items at a steep discount, and even for free. 

Free School Supplies 

Backpacks, laptops and tablets, calculators, books, and clothing are all necessary in classroom settings, but many parents cannot afford the hefty price tag. But there are plenty of ways to get these items for free, including online resources such as Freecycle, Facebook Marketplace, Just Free Stuff, and Smiley360, among others.

There are also many charitable organizations in each province that provide students with free school supplies needed during the year.

Free Furniture 

You can save tens of thousands of dollars furnishing your home by getting everything you need for free. For instance, you can check local college or university campuses on the last day of school when students move out of campus and are looking to liquidate their belongings. 

You can also scope out the neighbourhood for garage sales, or check out driveway curbsides on garbage day to see if anyone is getting rid of unwanted furniture that’s still in decent condition.

Free Baby Products 

Having a baby comes with a myriad of new costs that you otherwise wouldn’t have to think about, including baby bottles, diapers, strollers, cribs, and formula, among other things. And throughout your child’s life, you’ll be spending a pretty penny. In fact, it costs roughly $13,000 per year to raise a child in Canada from birth to age 18. 

But during those first couple of years, you may be able to alleviate the pressure on your wallet by taking advantage of freebies. One of the best ways to get free items is from baby samples provided by companies looking to gain loyal customers or to simply test out their items. Programs like Huggies No Baby Unhugged, Pampers Rewards, and Nestlé Baby & Me give away tons of free products that you and your baby need. 

Free Credit Score

If you’re looking to take out a loan or credit product, your credit score will impact your ability to get approved. That’s why it’s important to check your score before applying. 

But you shouldn’t have to pay to see your score. There are free online platforms and tools you can use, like Loans Canada’s CompareHub tool, that let you check your credit score for free.  

Never Pay Full Price 

There are so many strategies you can use to reduce the price of items you need. For starters, there are always coupons and online discount codes you can use to slash the cost of goods. You should also take the time to price match, whereby retailers will lower their prices to match a competitor’s. Most major retailers price match, including Best Buy, No Frills, and Canadian Tire. 

Don’t Forget About The Small Stuff

It’s not just the expensive items that cause a big dent in your budget. The little things can also impact your finances when you add them all up. Here are a few ways that the small stuff can cost you.   


While BNPL programs can make expensive items affordable with their no-interest payment plans, it can cause a lot of debt if you’re not careful. When you have multiple BNPL purchases, it can be hard to track and cause you to rack up debt. And if you miss payments, you may be slapped with additional penalty fees. 

Water Heater Rentals

Many homeowners in Canada prefer to rent their hot water tanks rather than buy them outright, to avoid making a lump sum payment for the purchase. But renting can end up costing a lot more over the long run.

For example, a brand-new hot water tank costs an average of about $1,000 and lasts an average of about 16 years. A hot water tank with a rental contract can add up to as much as $5,000 or more over a hot water tank’s average lifespan! 

Too Many Monthly Service Fees 

Food delivery services, streaming services, and even banking fees can really add up. For instance, paying for Netflix and Disney+ subscriptions would cost you nearly $30 per month or about $263 a year

By simply cancelling these subscription services for a few months or a year can save you a few hundred dollars that you can later put towards your debts. 

Protecting Yourself From Debt

To protect yourself from getting trapped in a mountain of debt in the future, consider the following: 

Have An Emergency Fund

It’s good practice to set aside some savings to act as a cushion should you ever experience financial challenges. At times, budgeting and reduction of expenditure are not enough to accommodate increasing monetary obligations. 

You also need to consider the possibility of a financial emergency, either because of tough economic times or because of a job loss, disability or illness. Planning ahead for such catastrophes will soften the blow once the crisis hits. 

How Much Should You Have Saved?

It is generally recommended that you have 3-6 months of your income or your monthly expenses saved. 

Get Insurance

If you’re someone who doesn’t have an emergency fund, consider getting insurance to help cover your debts in the case of illness, disability or job loss. Here are some different types of insurance that can protect you:

  • Creditor insurance provides financial assistance to you and your family by paying off your outstanding debt or taking over those payments, for a certain time period, if an unexpected event in your life makes it difficult for you to keep up with your financial obligations.
  • Disability insurance replaces a portion of your income if you’re unable to work due to disability. Generally speaking, disability insurance provides between 60% to 85% of your income.
  • Critical illness insurance pays out a one-time payment if you’re diagnosed with a debilitating or life-threatening illness. The amount you’re eligible for depends on the amount of coverage under your policy. 

What Can You Do If You Can’t Pay Off Your Debt? 

If your debt is becoming or has become too overwhelming for you to handle, reach out to a credit counsellor. They can help assess your financial situation and offer you custom debt relief solutions. While some options they may offer are simple, others might be more severe. 

Depending on your debt situation, you may need a debt management program, a consumer proposal, or bankruptcy. 

Bottom Line

While you can always get a side job to help whittle down your debt, there are so many other things you can do. Consider combining several of the above-mentioned strategies to help you pay off your debt faster.

Debt FAQs

Can missed payments affect my credit score?

Yes, missing bill payments can negatively affect your credit scores. In fact, payment history is a common factor used to calculate credit scores.

What can I use to track my spending? 

Budgeting apps are available to help you keep tabs on your spending and effectively manage your budget. Consider apps such as Mint, You Need A Budget (YNAB), or PocketGuard.

Does paying the minimum payments protect my credit score?

As long as you pay the minimum amount on your bill, your bill payment will not be considered late, which is a good thing for your credit score. However, making minimum payments will affect your credit utilization ratio, which is a common factor used to calculate credit scores. As such, minimum payments will keep your credit utilization ratio high and may impact your credit score negatively.

Can I consolidate debt with bad credit?

There are many different credit products you can use to consolidate your debts. Even if you have bad credit, you can still qualify for a debt consolidation loan, depending on the lender and credit product.
Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.
Best Online Savings Account In Canada 2024

By Trevor O'Hagan

Discover the best online savings account in Canada for 2024. Compare top rates, fees, and features to maximize your savings and reach your financial g...
Best TFSA Accounts In Canada 2024

By Lucas Elliott

Explore top TFSA accounts in Canada for 2024. Compare high-interest savings, GICs & investment options for tax-free savings.
Can You Defer Your Mortgage Payment?

By Bryan Daly

A mortgage deferral is a great short-term solution to financial hiccups. Find out everything you need to get a mortgage deferral.
Applying For a Mortgage Outside of Your Home Country

By Lisa Rennie

Purchasing property in a foreigh country is a great way to diversify your assets and allow you to earn rental income.
Affordable Housing Crisis In Canada

By Lisa Rennie

Check out what's affecting the housing market in Canada and learn about the affordable housing crisis in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Expert Tips
And Advice

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card