How to Make Extra Debt Payments Every Month

1. Increase Your Income

Increasing income can be a tall order, but you can evaluate your job situation and available time to see if it's a possibility. If you feel as though you're able to make a good argument for it, you can start by asking your current employer for a raise. And if you have the option to work overtime hours, that extra income can also make a difference.

If increasing your income at your current job isn't an option, changing jobs or even starting a side hustle in your spare time to get some extra cash could make sense.

2. Cut Your Discretionary Spending

Take a look at your budget to get an idea of where your money is going each month. If you don't have a budget, you can make one by looking at your income and expenses for the past few months and categorizing your expenses to understand how you're spending your money.

If you see opportunities to cut back on things like entertainment, eating out and other lifestyle spending, consider putting some of the extra cash you're saving toward your monthly debt payments.

You can also look for opportunities to cut your expenses without sacrificing your lifestyle. For example, you could split a streaming subscription with a family member or friend or search for coupons for activities, events and restaurants. Then, you can put the savings you gain from your efforts toward your debt payments—this approach is sometimes called the debt snowflake method.

3. Consider a Debt-Payoff Strategy

If you can afford to put even a little extra toward your debt payments each month, consider using the debt avalanche or snowball method to accelerate your payments.

With the debt avalanche method, you'll pay the minimum amount due on each account but add an extra payment or higher amount to the account with the highest interest rate. Once you've paid off that account, you'll add the extra payment amount to the account with the next-highest interest rate. You'll keep doing this with each account, creating an "avalanche" of payments until you've paid off your debt completely.

The debt snowball method works similarly, but instead of having you focus your efforts on the accounts with the highest interest rates, this method targets the accounts with the lowest balances. This strategy may be a better fit if you're struggling to stay motivated and want to get some wins early on in the process. If you're disciplined and want to maximize your interest savings, though, consider the avalanche approach.

4. Consolidate Your Debt

If you have good credit, debt consolidation could be a solid option. Consolidating debt involves paying off one or more existing balances with a new loan or credit card (preferably one with a lower interest rate). The most popular ways to do it are using a personal loan and a balance transfer credit card.

With a debt consolidation loan, you'll get a fixed repayment term, which can be helpful if you've struggled to pay more than the minimum amount due on your credit card. Ideally you'll also qualify for a lower interest rate than you're currently paying, which can save you money over the long term.

In contrast, balance transfer credit cards offer an introductory 0% APR promotion when you move your high-interest balances to your new card. You can then pay down the debt interest-free during the promotional period, which may last as long as 21 months before the card's standard rate kicks in. However, this may not be a good option if you're unlikely to pay off or significantly pay down the balance before you lose the 0% promotional rate.

Consolidating debt only works if you stop using the credit cards you paid off with the debt consolidation loan or balance transfer credit card. If you run up those balances again, you could end up worse off than before.

5. Consider Credit Counseling

If you're struggling to manage your current debts, including credit cards and personal loans, consider consulting with a credit counselor. These professionals can evaluate your situation and provide some advice on how to proceed.

You may be a good candidate for a debt management plan. With this option, the credit counseling agency can negotiate lower interest rates and monthly payments on your accounts. A debt management plan has you make payments to the credit counseling agency, which will then distribute the money to your creditors on your behalf. Debt management plans typically last three to five years.

Keep in mind that you may need to close your credit card accounts, which can negatively impact your credit. Additionally, you'll typically need to pay a one-time setup fee and a monthly fee throughout the plan.

6. Avoid Taking on New Debts

While you're working on paying down your debt, try to avoid adding more to your plate. For instance, if you tend to cover your everyday expenses with credit cards, you may consider switching to a debit card. That way, it doesn't feel like you're losing progress with every new purchase.

Also, unless you have an urgent financial need, try to avoid applying for other loans or credit cards so you don't create more monthly obligations. Note that this doesn't apply to debt consolidation because you're not taking on more debt, just moving your balances to a new loan or credit card to pay it off faster.

7. Know Your Limits

While accelerating your debt payoff plan can help you save both time and money, it's important to understand your limits and avoid missing out on other important financial goals.

If you don't have an emergency fund, for instance, it may make sense to build up a small buffer in case of a rainy day. After all, if you put all of your savings toward debt payments and experience a financial emergency, you may have to borrow more to cover your needs.

Additionally, if you have a 401(k) at work and your employer offers to match your contributions, consider contributing enough to maximize that match before focusing on your debt. While interest payments can be expensive, it's important to set aside savings toward your future retirement.

The Bottom Line

There are many strategies you can use to increase your monthly payments. As you evaluate your situation and goals, focus on methods that work best for you and tailor your approach to meet your specific needs. If you're not certain where to start, find a good credit counselor who can point you in the right direction.

Throughout the process, it's also important to monitor your credit so you can track your progress and address potential problems before they get out of hand. With Experian's free credit monitoring service, you'll get access to your FICO^® Score^☉ and Experian credit report, plus real-time alerts when changes are made to your report.