diff --git a/lnwallet/channel.go b/lnwallet/channel.go
index 54d42b52..0d13f6ba 100644
--- a/lnwallet/channel.go
+++ b/lnwallet/channel.go
@@ -152,7 +152,6 @@ type PaymentDescriptor struct {
 	// isForwarded denotes if an incoming HTLC has been forwarded to any
 	// possible upstream peers in the route.
 	isForwarded bool
-	settled     bool
 
 	// pkScript is the raw public key  script that encodes the redemption
 	// rules for this particular HTLC. This field will only be populated
@@ -409,6 +408,13 @@ type LightningChannel struct {
 	ourLogIndex   map[uint32]*list.Element
 	theirLogIndex map[uint32]*list.Element
 
+	// rHashMap is a map with PaymentHashes pointing to their respective
+	// PaymentDescriptors. We insert *PaymentDescriptors whenever we
+	// receive HTLCs. When a state transition happens (settling or
+	// canceling the HTLC), rHashMap will provide an efficient
+	// way to lookup the original PaymentDescriptor.
+	rHashMap map[PaymentHash][]*PaymentDescriptor
+
 	LocalDeliveryScript  []byte
 	RemoteDeliveryScript []byte
 
@@ -465,6 +471,7 @@ func NewLightningChannel(signer Signer, events chainntnfs.ChainNotifier,
 		theirUpdateLog:        list.New(),
 		ourLogIndex:           make(map[uint32]*list.Element),
 		theirLogIndex:         make(map[uint32]*list.Element),
+		rHashMap:              make(map[PaymentHash][]*PaymentDescriptor),
 		Capacity:              state.Capacity,
 		LocalDeliveryScript:   state.OurDeliveryScript,
 		RemoteDeliveryScript:  state.TheirDeliveryScript,
@@ -830,6 +837,7 @@ func (lc *LightningChannel) restoreStateLogs() error {
 		} else {
 			pd.Index = theirCounter
 			lc.theirLogIndex[pd.Index] = lc.theirUpdateLog.PushBack(pd)
+			lc.rHashMap[pd.RHash] = append(lc.rHashMap[pd.RHash], pd)
 
 			theirCounter++
 		}
@@ -1675,6 +1683,8 @@ func (lc *LightningChannel) ReceiveHTLC(htlc *lnwire.HTLCAddRequest) (uint32, er
 	lc.theirLogIndex[pd.Index] = lc.theirUpdateLog.PushBack(pd)
 	lc.theirLogCounter++
 
+	lc.rHashMap[pd.RHash] = append(lc.rHashMap[pd.RHash], pd)
+
 	return pd.Index, nil
 }
 
@@ -1686,25 +1696,13 @@ func (lc *LightningChannel) SettleHTLC(preimage [32]byte) (uint32, error) {
 	lc.Lock()
 	defer lc.Unlock()
 
-	var targetHTLC *PaymentDescriptor
-
-	// TODO(roasbeef): optimize
 	paymentHash := fastsha256.Sum256(preimage[:])
-	for e := lc.theirUpdateLog.Front(); e != nil; e = e.Next() {
-		htlc := e.Value.(*PaymentDescriptor)
-		if htlc.EntryType != Add {
-			continue
-		}
 
-		if !htlc.settled && bytes.Equal(htlc.RHash[:], paymentHash[:]) {
-			htlc.settled = true
-			targetHTLC = htlc
-			break
-		}
-	}
-	if targetHTLC == nil {
+	targetHTLCs, ok := lc.rHashMap[paymentHash]
+	if !ok {
 		return 0, fmt.Errorf("invalid payment hash")
 	}
+	targetHTLC := targetHTLCs[0]
 
 	pd := &PaymentDescriptor{
 		Amount:      targetHTLC.Amount,
@@ -1717,6 +1715,12 @@ func (lc *LightningChannel) SettleHTLC(preimage [32]byte) (uint32, error) {
 	lc.ourUpdateLog.PushBack(pd)
 	lc.ourLogCounter++
 
+	lc.rHashMap[paymentHash][0] = nil
+	lc.rHashMap[paymentHash] = lc.rHashMap[paymentHash][1:]
+	if len(lc.rHashMap[paymentHash]) == 0 {
+		delete(lc.rHashMap, paymentHash)
+	}
+
 	return targetHTLC.Index, nil
 }
 
@@ -1761,21 +1765,12 @@ func (lc *LightningChannel) CancelHTLC(rHash [32]byte) (uint32, error) {
 	lc.Lock()
 	defer lc.Unlock()
 
-	var addEntry *PaymentDescriptor
-	for e := lc.theirUpdateLog.Front(); e != nil; e = e.Next() {
-		htlc := e.Value.(*PaymentDescriptor)
-		if htlc.EntryType != Add {
-			continue
-		}
-
-		if !htlc.settled && bytes.Equal(htlc.RHash[:], rHash[:]) {
-			addEntry = htlc
-			break
-		}
-	}
-	if addEntry == nil {
+	addEntries, ok := lc.rHashMap[rHash]
+	if !ok {
 		return 0, fmt.Errorf("unable to find HTLC to cancel")
 	}
+	addEntry := addEntries[0]
+
 	pd := &PaymentDescriptor{
 		Amount:      addEntry.Amount,
 		RHash:       addEntry.RHash,
@@ -1787,6 +1782,12 @@ func (lc *LightningChannel) CancelHTLC(rHash [32]byte) (uint32, error) {
 	lc.ourUpdateLog.PushBack(pd)
 	lc.ourLogCounter++
 
+	lc.rHashMap[rHash][0] = nil
+	lc.rHashMap[rHash] = lc.rHashMap[rHash][1:]
+	if len(lc.rHashMap[rHash]) == 0 {
+		delete(lc.rHashMap, rHash)
+	}
+
 	return addEntry.Index, nil
 }