Debt can feel like a weight you carry everywhere. Loan app reminders, credit card bills and money owed to friends can cause stress, strain relationships and make it hard to plan for the future. The good news is that with a clear plan, you can get out of debt — step by step. This guide shows you how to organise your debts, choose a repayment strategy and stay debt-free afterwards.

Step 1: Face the Numbers

Many people avoid looking at their debts because it feels overwhelming. But clarity is the first step to control. List every debt:

Lender Balance owed Interest rate/fees Minimum payment Due date

Include bank loans, credit cards, loan apps, salary advances, buy-now-pay-later plans, overdrafts and money borrowed from family and friends.

Step 2: Stop Adding New Debt

You can't fill a bucket with a hole in it. While you repay:

  • pause credit card use and delete loan apps from your phone,
  • avoid new instalment purchases,
  • use cash or debit for everyday spending.

Step 3: Create a Budget Focused on Debt Repayment

A budget shows how much you can put towards debt each month. Our guide on how to create a budget explains the process. Cover essentials first, pay every minimum payment, then direct every spare amount to your target debt.

Step 4: Build a Small Emergency Buffer

It may seem strange to save while in debt, but without a small buffer, the next surprise expense pushes you back into borrowing. Aim for a small starter emergency fund — even two weeks of expenses — before attacking debt aggressively.

Step 5: Choose a Repayment Strategy to Get Out of Debt

The debt avalanche

Pay minimums on everything, then put all extra money towards the debt with the highest interest rate. When it's paid off, move to the next highest.

  • Pros: saves the most money in interest.
  • Best for: people motivated by numbers and efficiency.

The debt snowball

Pay minimums on everything, then put extra money towards the smallest balance first. When it's cleared, roll that payment into the next smallest.

  • Pros: quick wins build motivation.
  • Best for: people who need visible progress to stay on track.

Both methods work. The best one is the one you'll stick with. Some people use a hybrid: clear one or two tiny debts first for motivation, then switch to the avalanche.

Step 6: Reduce Your Interest Costs

  • Negotiate with lenders. Ask for lower rates, waived fees or extended terms, especially if you're struggling. Many lenders prefer a repayment plan over defaults.
  • Consider consolidation carefully. Combining debts into one lower-interest loan can simplify payments, but only helps if the total cost is lower and you don't borrow again.
  • Beware of expensive loan apps. Some charge very high fees for short periods. Prioritise clearing these.

Step 7: Increase Your Income

Cutting costs has limits; income doesn't. Ideas include:

  • asking for a raise or taking on overtime,
  • freelancing or tutoring,
  • selling items you no longer use,
  • starting a small side hustle — see our list of side hustle ideas.

Put all extra income directly towards your debt.

Step 8: Cut Costs Temporarily

Treat debt repayment like a sprint. Temporarily cut non-essential spending: eating out, subscriptions, premium data, and expensive entertainment. Our 25 ways to save money fast give practical ideas.

Step 9: Stay Motivated

  • Track your total debt monthly and watch it fall.
  • Celebrate milestones with small, low-cost rewards.
  • Share your goal with someone supportive.
  • Remember why you're doing it — freedom, peace of mind, future goals.

Borrowing From Family and Friends

Personal debts matter too. Agree on a clear repayment plan in writing, communicate honestly if you'll be late, and prioritise repaying people who are relying on the money.

If You Can't Keep Up With Payments

If your debts are unmanageable:

  1. Contact lenders early — before you miss payments.
  2. Ask about hardship programmes, payment holidays or restructuring.
  3. Seek help from reputable, non-profit debt advice services where available.
  4. Beware of "debt relief" companies that charge large upfront fees.

How to Stay Debt-Free

  • Keep a fully funded emergency fund.
  • Save for planned purchases instead of borrowing.
  • Use credit only for things you can pay off quickly.
  • Review your budget monthly.
  • Start investing once debt-free — see investing for beginners.

Frequently Asked Questions

Which debt should I pay off first?

Mathematically, the highest-interest debt (avalanche). For motivation, the smallest balance (snowball). Always keep up minimum payments on all debts.

Should I use my savings to pay off debt?

Keep a small emergency fund, but using extra savings to clear high-interest debt often makes sense because the interest you save is usually higher than the interest savings earn.

Is debt consolidation a good idea?

It can be if it lowers your total interest and you stop borrowing. Read the terms carefully and compare total costs.

How long does it take to get out of debt?

It depends on the amount, interest and how much you can pay. A clear plan with extra payments usually shortens the timeline dramatically.

Final Thoughts

You can get out of debt with honesty, a plan and persistence. List your debts, stop borrowing, choose the avalanche or snowball method, and direct every spare amount to repayment. Explore more money guides in our Money section.

This article is for general education and isn't personal financial advice.