How an extra $25 per week can help you pay off every kind of debt more quickly


When you're trying to get out of debt, putting a little bit extra toward your regular payment can go a long way.

Some 77% of Americans shoulder some form of personal debt. Whether you're focused on eliminating balances on an auto loan, mortgage, credit card, or student loan, putting an extra $25 per week towards the debt can shave years off of your repayment timeline and save you hundreds, or even thousands, of dollars in interest charges.

Here's how $25 per week, or an extra $100 per month, can make a difference when chipping away at different kinds of debt.

Credit card debt

Certified financial planner Marguerita Cheng worked with one client who had a credit card balance of $875 at an annual percentage rate of 8.9%.

"The minimum payment is 20 bucks a month," says Cheng, who is also the CEO of Blue Ocean Global Wealth. At that rate, it would take about 4.5 years to eliminate the balance. But had Cheng's client paid an additional $25 per week — or a total payment of $120 per month — she could have wiped out her debt in less than one year.

The average household with credit card debt owes $9,333 as of 2018, and the average credit card interest rate is 17.73%. If you're paying $200 per month toward that average balance, you'd eliminate your debt 80 months from now — and have paid more than $6,600 in interest.

But by putting just $25 a week more towards that debt, you'll be debt-free more than four years sooner and pay roughly $4,300 less in interest.

Read more: How an extra $25 a week can get you out of credit card debt faster

Student loans

Some 44 million Americans are saddled with student loans. To pay off her $111,000 student loan debt faster, Kiera Carter created a budget, cut costs and took on side hustles to bring in an extra $100 per month.

Carter consistently chipped away at her debt and was able to pay off her student loans without totally altering her lifestyle before she turned 32 this year.

Finding that extra $25 can be as simple as readjusting your spending and savings habits, Cheng says.

Read more: How an extra $25 a week can get you out of student loan debt faster

When people see that they're paying down debt, and they're saving, they start to feel pretty good about themselves.
Marguerita Cheng
Certified financial planner


A mortgage may be the biggest loan you'll ever take out, and your repayment timeline could stretch out to 30 years. As of mid-July, the average rate for a 30-year, fixed-rate mortgage is 3.75%. That means if you take out a $150,000 mortgage, your monthly payment would be about $695, and you'd shell out almost $100,000 in interest over the life of the loan.

But by adding in an extra $25 per week, so you're paying $795 per month instead of $695, your repayment period would be cut down by more than six years, and you would pay almost $25,000 less in interest overall.

You'll benefit from more than just the savings. "Maybe you don't want to have to deal with a monthly payment and the worry of having debt," says Joe Mellman, senior vice president of TransUnion's mortgage business. "There's a peace of mind that can come with not being in debt."

Read more: How an extra $25 a week can help you pay off your home faster

Auto loans

Paying a little extra each month can have long-term benefits. For instance, maintaining constant activity on your auto loan account shows your lender that you intend to pay off your loan in full.

Let's say you pay $551 per month on a loan of $32,187 at an interest rate of 6.19%. That means you'll pay off your car loan debt in 70 months, or a little under six years, and pay $6,214 in interest.

But if you increase your payment by $25 per week, or $100 per month, and pay $651 instead of $551 at the same interest rate, you could decrease your repayment period by a full year and save $1,147 in interest.

"Even if you can start with something as small as $50 a month, what you think is uncomfortable becomes comfortable," says Cheng. "When people see that they're paying down debt, and they're saving, they start to feel pretty good about themselves."

Read more: How quickly you can wipe out your car loan with an extra $25 per week

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