The Most Efficient Ways to Repay Your Debt

It is difficult for most individuals to go through life without getting a personal loan or a mortgage, however, repaying that debt can be even more difficult. This is especially true for those who take out multiple loans that put a lot of strain on their finances. Luckily, there are a few methods that you can use in order to keep your debt under control. Each of them is useful in its own right, however, if you want to be truly efficient when it comes to how you repay your debt, you should try to use all of them:

1. Establish your priorities when it comes to repaying your debt

If you have taken out multiple loans or have different types of debt, it is likely that you will have to pay different interest rates. This makes it essential to prioritise your debt. Generally speaking, you should always try to pay off your most expensive loans first. Select the one that has the highest interest rate and is worth the least amount of money. This will allow you to take off some of the strain on your finances and make it easier to repay larger loans that have a longer duration.

2. Consider getting a debt consolidation loan

Almost all banks offer these loans and they can be invaluable when you have a lot of debt. They are usually long-term loans that can be paid in as much as 10-15 years. In terms of value, a consolidation loan should allow you to borrow enough money to repay at least one or two of your existing loans.

This having been said, when it comes to debt consolidation, you should pay off your most expensive types of debt first.

There are lots of debt consolidation products out there.

3. Consider getting a line of credit and using it instead of a credit card

Lines of credit are orders of magnitude more affordable than credit cards, provided that you’re smart about using them. They often have great terms and conditions and you only pay interest for what you actually use. In other words, if you get a £10,000 line of credit and take out £500, you will be charged a minimal administration commission each month, but you will only pay interest for the £500.

The entire amount is always available to you, but if you either do not use any part of it or repay the money until the end of the month, you won’t pay any interest. Just like credit cards, lines of credit offer a lot of freedom in terms of what you can do with the money, provided that you get a good deal from the bank. This means that you will also be able to use it in order to pay off your credit cards or smaller short-term loans that you might have.

The main disadvantage when it comes to lines of credit is the fact that they are secured, and that you need to have a relatively good credit score in order to get one.


These three methods will help you keep your debt under control and may even raise your credit score in the process. As mentioned at the beginning, it is not necessary to use all of our suggestions, however, they do complement each other. By prioritising your most expensive loans and paying them off first, then consolidating your remaining debt and, lastly, using a line of credit to repay your credit cards, you will be able to better manage your debt and make it easier to return the money that you’ve borrowed.
As a bonus tip, lines of credit are often long-term commitments, so you can use them even after you’ve repaid your loans. Once you solve the issue of your debt, consider giving up your credit cards, and only use the money from the line of credit.

Give a Comment