How to get out of debt (2024)

If you’re wondering how to get out of debt, you’re certainly not alone. In the fourth quarter of 2023, total household debt stood at a staggering $17.5 trillion, with credit card balances at a high of $1.13 trillion, according to the Federal Reserve Bank of New York.

Though debt can pile up for various reasons, the result is the same. The monthly payments and interest can become a major burden, leading to stress and financial anxiety. Below, we’ll cover strategies for getting out of debt and what to consider on your debt repayment journey.

1. List out your debt details

Creating a plan to get out of debt requires focus and specificity. That means taking a hard look at all of your debt. For each outstanding balance, list out the…

  • Type of debt (such as student loans and credit cards).
  • Lender.
  • Total balance.
  • Interest rate.
  • Monthly payment.

This list gives you an honest look at what you really owe. It can also come in handy later, when you figure out a debt repayment strategy.

“Too often we focus on just one debt that we see as the most urgent — in truth, perception is not always reality,” said Bobbi Rebell, a CFP, author and founder of the Financial Wellness Strategies website. “For example, with student loan payments coming back (from a pause in October 2023), that might seem like something to prioritize… But student loans often have manageable interest rates compared to other kinds of debt, like consumer debt. So it’s important to really sit down and go over each debt and the cost of carrying it, and then put a plan together.”

Tool tip: Try out a free debt payoff planner and tracker from Happy Giraffe, a nonprofit that focuses on budgeting education.

2. Adjust your budget

Getting out of debt requires making some changes and adjusting your budget.

“Debt doesn’t happen overnight, and doesn’t get fixed overnight — so [when] you make the decision that you want to pay off debt, you have to have that mindset,” said Amy Irvine, a CFP at New York-based Rooted Planning Group, a fee-only financial planning group. “Look at your current spending habits, what can you cut out, even if it’s temporary. This can create awareness and ensure you don’t continue to build additional debt.”

To start, write down your total monthly take-home income and list out your expenses:

  • Mark certain expenses as “must-haves,” which are your needs — such as housing, insurance, food and transportation.
  • Mark other expenses as “nice to have,” and those are your wants. These can include smaller, recurring costs like streaming subscriptions or larger one-offs like travel.

Are there expenses that you can eliminate from your budget, even for a short time? If not, is there a way to reduce the total costs? For example, instead of dining out twice a week, you cut down to once a week. Though it’s not pleasant to cut back if you’re used to a certain lifestyle, remember this is temporary, and focus on the goal of debt freedom.

Tool tip: To track your income and expenses, consider using a free budgeting tool like Mint.

3. Try the debt snowball or avalanche method

Figuring out how to get out of debt can be stressful, but having a repayment strategy can keep you focused. Enter the debt snowball and the debt avalanche repayment methods.

The debt snowball method essentially creates a snowball effect when you pay the minimum on all debts, while putting extra toward the smallest balances. You can start to see progress while paying off the lowest balances first, then move on to the next.

The debt avalanche method saves money on interest when you pay the minimum on all debts while putting extra funds toward the balance with the steepest interest rate. Once that costliest account is paid off, the extra funds move to the balance with the next highest rate until all debts are repaid.

Debt snowballDebt avalanche

Pays minimum on all debts

Pays minimum on all debts

Put extra funds toward smallest balance

Put extra funds toward highest interest rate debt

May boost motivation

May boost interest savings

“Paying off the highest interest rate debt (avalanche) will save the most money, but the plan that will be successful is the one you can stick to,” said Rebell, the author of “Launching Financial Grownups.”

If motivation keeps you focused, the debt snowball method may be for you.

“Although you typically will save more with the debt avalanche, in my experience, people stick with the debt snowball because they can ‘see’ progress,” said Irvine.

Tool tip: Use a calculator from to understand how the snowball and avalanche methods will affect your repayment.

4. Submit more than the minimum payment

If you want to learn how to get out of debt fast, it’s key to pay more than the minimum amount due each month. This way, you can start to tackle the interest and chip away at the principal balance.

By cutting back on expenses in your budget (step two, above), you can allocate those funds toward your debt. Additionally, commit to using any windfalls toward your debt repayment. Sudden cash infusions include:

  • Tax refund
  • Inheritance
  • Refunds from overpayment
  • Proceeds from selling items

Let’s review two examples of how paying more than the minimum can save you money (and grief).

Increase your payment amount

Let’s say you have $40,000 in student loans at 6.8% interest, on a 10-year repayment term. Your monthly payment would be $460 and, over time, you’d pay a total of $15,239 in interest.

If you add $50 to your payment per month, increasing it to $510, you would pay $13,039 in interest. That would net you $2,200 in savings over a decade.

Make a one-time, lump-sum payment

Let’s say you have $10,000 in credit card debt tagged with a 16% APR. Your minimum payment would be $233. By paying the minimum, you can expect to pay off the debt in 64 months, costing you $4,926 in interest.

With a single, lump-sum payment of $3,000 thanks to your tax refund, for example, you could trim those figures to 39 months and $1,999 in interest. Thanks to this strategy, you’d reduce your repayment by two years and save $2,927 in interest.

5. Cut down interest by making biweekly payments

Another way to get out of debt quickly — or at least quicker than you would otherwise — is by making biweekly payments. This strategy means cutting your monthly payments in half and making payments every two weeks — it’s particularly effective for student loans.

If your monthly loan payment is $300, for example, you’d pay $150 every two weeks. Just be sure that all $300, in this scenario, is submitted before your minimum payment due date.

As a result of this cadence, you’d make an additional payment by the end of the year. One extra payment can reduce total interest costs and reduce your repayment time.

Say you have a student loan balance of $35,000 at 5% interest, on a 10-year repayment term. Making biweekly payments can shave off a year of repayment and save you $1,113 in interest.

6. Attempt to negotiate and settle for less than you owe

If you’re in over your head with credit card debt, consider negotiating with your creditors and settling for less than you owe. Typically, this strategy is best if you’re delinquent with payments and debt collectors are contacting you.

Rarely does this tactic work in other instances, as creditors generally only grant settlements to borrowers who aren’t likely to repay their debt in full.

Based on your income and expenses, suggest a repayment plan that works for you and see what your creditor says. Depending on your situation, you might propose a lump sum or monthly payments; if accepted, get a full agreement in writing from the company outlining the plan.

Be wary of scammy companies offering debt settlement services for a fee. To be safe, work with a company accredited by the American Fair Credit Council.

What if debt settlement doesn’t work?

If you’re not delinquent but are struggling, ask your credit card company if they can lower the interest rate or establish a payment plan. Another option is to work with a nonprofit credit counseling agency — but do your research.

“It’s important to tread carefully and vet any advisor you engage, regardless of whether they’re at a non-profit or some other entity,” said Rebell. “Understand who is paying them and be sure their advice is not biased or influenced in any way that does not put you first.”

A nonprofit credit counseling agency may offer you a debt management plan where you work with a credit counselor who can provide support — and may be able to work with your creditor to get a lower interest rate. You deposit funds into a specified account and your credit counselor makes payments until your debt is paid off. To find an agency, start with the list of approved providers compiled by the Department of Justice (DOJ).

Irvine said you can do some quick math to determine whether it’s time to work with a nonprofit credit counselor.

“If your debt-to-income (ratio) exceeds 40%, then I think that is a critical line in the sand,” she said. “If you’re paying 30% in taxes, 40% in debt repayment, then it only leaves you with 30% to live off and save; that’s pretty challenging and not likely sustainable long-term.”

7. Consider consolidating and refinancing your debt

Getting out of debt can feel insurmountable. To make it more manageable and affordable, consider consolidating and refinancing your outstanding balances.

These strategies typically involve another type of loan that pays off your existing debt at a lower rate. Some options include:

Debt consolidation

You may qualify to get a personal loan at a lower rate that can be used for debt consolidation. For example, you could use a personal loan to pay off various credit card balances at higher rates. You’d trade multiple balances at higher rates with one loan at a lower rate.

When you’re ready to shop around, consider CNN Underscored Money’s top-rated debt consolidation lenders:

Our picks at a glance

LenderRatingAPRs*Repayment termsLoan amounts



8.99% to 29.49%

2 to 7 years

$5,000 to $100,000



Up to 35.99%

1 to 5 years

$300 to $10,000

Best Egg


5.99% to 35.99%

3 to 5 years

$2,000 to $50,000

PenFed Credit Union


7.99% to 17.99%

1 to 5 years

$600 to $50,000

Laurel Road


9.49% to 23.25%

3 to 5 years

$5,000 to $45,000

OneMain Financial


18.00% to 35.99%

2 to 5 years

$1,500 to $20,000



9.57% to 35.99%

2 to 5 years

$1,000 to $40,000

First Tech Credit Union


9.29% to 18.00%

2 years to 80 months

$500 to $50,000

PNC Bank


8.19% to 30.00%

6 months to 5 years

$1,000 to $35,000

Navy Federal Credit Union


8.99% to 18.00%

1 to 5 years

$250 to $50,000

* Rates as of Feb. 20, 2024 and may assume discounts

Balance transfer

If you have strong credit scores, you may qualify for a balance transfer credit card. This is specifically used to transfer your balances from one or multiple cards to another with a lower interest rate.

A balance transfer card is typically only a good idea, however, if you pay most or all your debt during the promotional period, which could span 12 to 21 months.

If you go this route, expect to pay 3% to 5% in fees and review when the promotional period ends. The interest savings can help propel your debt payoff.

For example, let’s say you have $5,000 in credit card debt at 18% and pay $125 per month. Then, you get approved for a 15-month, 0% balance transfer card with a 3% balance transfer fee.

To pay off your balance during the promotional period, your new estimated payment would be $343 and you’d save $2,542 in interest. While the interest savings is great, your monthly payment more than doubles. If you can afford that, this can be a worthwhile strategy.

Student loan refinancing

Private lenders, including banks, credit unions and online companies, offer student loan refinancing to borrowers and may advertise better rates than your current APRs. The better your credit, the likelier you can access those basem*nt rates.

If you have federal loans, though, consider this strategy carefully. If you refinance federal loans, you would become ineligible for federal government-exclusive forgiveness and income-driven repayment plans.

If you want to get out of debt fast and a lower interest rate can help, review your options, which include refinancing only your private student loans.

Related >> Best student loan refinance lenders

8. Work to boost your income

The amount you put toward your debt repayment is closely related to your current income and expenses. But you might wonder how to get out of debt when you’re broke (or at least feeling that way).

If you’ve reduced your expenses (step two, above) and hit your limit, work toward boosting your income. Some options include:

  • Take on a side hustle. Use your existing skills to earn more on the side. You can freelance and offer your services or sign up for gig work (perhaps with a ride-share company). Another option is to pet sit or walk dogs through Rover, Wag, and Meowtel.
  • Sell items. Take an inventory of what you own. What do you no longer need or use? Take those items and sell them using Facebook Marketplace, Poshmark, Mercari and OfferUp.
  • Ask for a raise. Do some research on salaries for your job and industry and see if you could be earning more. Informed with data, and with your accomplishments to back it up, ask for a raise and earn more from your job.
  • Change jobs or careers. Sometimes the best way to earn more is by changing jobs. A new employer may pay more for your experience. Also, consider transitioning to a different career that may offer higher pay.

If you want to figure out how to get out of debt quickly, these eight steps can help you get on the right track. While paying off debt can be tough, it’s possible. Once your debt is paid off, you can focus on wealth-building and earning interest rather than paying it.

Lesser-known tips for serious debt management

If you’re in serious debt, you may need an unconventional approach to handle what you owe.

Reconsider your tax filing status

Married federal student loan borrowers on an income-driven repayment (IDR) plan may want to change their tax status. Married filing jointly considers both incomes, whereas filing separately is based on the individual borrower. Discuss the advantages and drawbacks with a tax professional.

Another option is to change your withholding on your Form W-4. So if you usually get a tax refund, adjusting your withholding may boost your paycheck now so you can put more toward debt. Keep in mind that this strategy may leave you owing money when it’s time to file your taxes.

Look into ‘LRAPs’

Healthcare professionals may qualify for state-based student loan repayment assistance programs (LRAPs), such as one sponsored by the National Health Service Corps.

If you’re in another profession, research state, school and employer-based loan repayment programs. You can also find LRAPs via professional and educational groups, such as the Association of American Medical Colleges and the American Bar Association.

Attend Debtor’s Anonymous

If your debt is taking over your life and is compulsive, get support and resources through the 12-step Debtors Anonymous program.

Try a debt repayment app

Smartphone apps like Changed work by rounding up your purchases to the nearest dollar — and putting that amount toward your debt. Friends and family can sign up and have their spare change go to your debt, too. Like crowdfunding your repayment online, it’s an every-little-bit-helps approach.

Talk it out before considering bankruptcy

Consulting a certified credit counselor — see the DOJ’s list of approved agencies linked above — is a good first step in exploring debt management plans and more drastic measures.

Though bankruptcy isn’t an ideal solution — and definitely doesn’t offer a “fresh start” — it’s one more way to approach crushing debt. Bankruptcy will stay on your credit report for 7 or 10 years, depending on the type of bankruptcy you file. This option should be last on the list and considered carefully given the long-term credit consequences.

What’s the average debt per American?

The median household debt in 2022 was $80,220, according to Federal Reserve data. But when looking at debt loads by category, there are stark differences.

Median debt by age

Age rangeMedian debt

Less than 35










75 or older


Source: Federal Reserve

Median debt by race, ethnicity

Race, ethnicityMedian debt









Source: Federal Reserve

Total outstanding non-household debt by product

ProductTotal debt

Auto loans

$1.61 trillion

Student loans

$1.60 trillion

Credit card

$1.13 trillion


$550 billion

Source: Federal Reserve Bank of New York, as of Q4, 2023

Average outstanding non-household debt by product

ProductAverage debt

Student loan


Auto loan


Personal loan


Credit card


Retail credit card


Source: Experian, as of Q3, 2023

Related >> Average student loan debt

How debt negatively impacts your life

Burdensome debt not only affects your financial and mental health but other areas of your life as well.

Credit eligibility

If you owe a significant amount relative to your income, your debt-to-income ratio (DTI) will be high. Your DTI is considered by lenders when you apply for credit, and a high DTI can make you ineligible (at least without a cosigner or co-borrower).

How to lessen this impact: Reduce your debt balances and increase income (see tips above).

High interest rates

Even if you get approved for a loan or credit, you may still face steep interest rates. Borrowers with bad credit will be charged the most — and it can add up. The annual percentage rate (APR) on loans directly affects the amount of interest you pay over the life of the loan.

And over-relying on the plastic in your wallet can be damaging. Currently, APRs on credit cards have hit their peak, nearly doubling in the last decade, according to the Consumer Financial Protection Bureau.

How to lessen this impact: Improve your credit scores, in part by repaying debt on schedule.

Debt cycle

If your debt creeps up and goes unchecked, you can easily get into an unrelenting debt cycle. To make ends meet, you borrow from one lender to pay off another, getting trapped in this vicious cycle.

How to lessen this impact: Figure out the underlying cause of the debt, such as lack of income or overspending.

Employer credit checks

Some employers in certain states may review your credit as part of a background check, especially if you work in a financial-related role or industry. If you have significant debt, it may show up on your credit check and potentially impact hiring decisions.

How to lessen this impact: Review laws in your state around employer credit checks, perhaps starting with your local office of the US Equal Employment Opportunity Commission.

Reduced federal benefits

If you default on federal student loans, the government could garnish 15% of your wages, and your tax refunds and Social Security benefits may be impacted as well.

How to lessen this impact: Use the US Department of Education’s Fresh Start program to get out of default and reinstate benefits.

Frequently asked questions (FAQs)

Secured debt is a loan that’s backed by collateral, or a type of asset. If your repayment goes awry, that asset could be vulnerable to seizure.

Unsecured debt, however, isn’t backed by collateral. You qualify for unsecured debt on the basis of your credit.

Track your debt repayment progress by using a spreadsheet, mobile app, or even pen and paper. Find an option that helps you stay consistent and motivated.

Using a new loan to pay off other debts may be helpful if you’ve figured out the root cause of your debt and can obtain a lower rate. Be aware of fees and monthly payments, and understand that another loan could lead to additional debt if not used wisely.

If you’re using too much of your available credit (high credit utilization rate) or have missed payments (delinquency) on your debt, it may hurt your credit scores.

If you’re struggling with debt, ask your creditors if they’re willing to lower your interest rate. It’s up to their discretion — not all lenders have hardship programs — but you can always ask.

Depending on the type of bankruptcy, your debt might be discharged or you’ll have a repayment plan. Debt settlement, on the other hand, refers to working with a company that claims it can help you with your debt and settle for a lower amount.

How to get out of debt (2024)


How to get out of debt? ›

Use a debt consolidation loan

With a debt consolidation loan, you borrow money from a lender and roll all of those debts into one loan with a single interest rate. This allows you to make one monthly payment rather than paying multiple creditors.

How can I get out of debt asap? ›

Tips for How to Get Out of Debt Fast
  1. Lower your expenses. Once you've made your budget, go through it line by line and see where you can cut back on your spending. ...
  2. Increase your income. Think of your income as a shovel. ...
  3. Cut up your credit cards. ...
  4. Know your why. ...
  5. Take Financial Peace University.
7 days ago

How can I pay off my debt if I don't have enough money? ›

How to get out of debt on a low income
  1. Sign up for a debt relief program.
  2. Cut expenses to free up extra cash.
  3. Take advantage of opportunities to earn more money.
  4. Use financial windfalls to your advantage.
Feb 29, 2024

What can I do if I can't pay my debt? ›

Here are some debt-relief options to consider.
  1. Create a Budget. ...
  2. Do Nothing and Get Debt Relief That Way. ...
  3. Negotiate With Your Creditors to Get Debt Relief. ...
  4. Seek Debt-Relief Assistance From a Consumer Credit Counseling Agency. ...
  5. File for Bankruptcy to Get Debt Relief. ...
  6. Get Help With Your Federal Student Loans.

How to pay $30,000 debt in one year? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

How to pay off $20k in debt fast? ›

Use a debt consolidation loan

With a debt consolidation loan, you borrow money from a lender and roll all of those debts into one loan with a single interest rate. This allows you to make one monthly payment rather than paying multiple creditors.

Can I get a government loan to pay off debt? ›

While there are no government debt relief grants, there is free money to pay other bills, which should lead to paying off debt because it frees up funds. The biggest grant the government offers may be housing vouchers for those who qualify. The local housing authority pays the landlord directly.

How to pay off $15,000 fast? ›

How to Pay Off $15,000 in Credit Card Debt
  1. Create a Budget. ...
  2. Debt Management Program. ...
  3. DIY (Do It Yourself) Payment Plans. ...
  4. Debt Consolidation Loan. ...
  5. Consider a Balance Transfer. ...
  6. Debt Settlement. ...
  7. Lifestyle Changes to Pay Off Credit Card Debt. ...
  8. Consider Professional Debt Relief Help.

How to pay off debt when you are broke? ›

How to get out of debt when you have no money
  1. Step 1: Stop taking on new debt. ...
  2. Step 2: Determine how much you owe. ...
  3. Step 3: Create a budget. ...
  4. Step 4: Pay off the smallest debts first. ...
  5. Step 5: Start tackling larger debts. ...
  6. Step 6: Look for ways to earn extra money. ...
  7. Step 7: Boost your credit scores.
Dec 5, 2023

How do I pay off debt if I live paycheck to paycheck? ›

Tips for Getting Out of Debt When You're Living Paycheck to Paycheck
  1. Tip #1: Don't wait. ...
  2. Tip #2: Pay close attention to your budget. ...
  3. Tip #3: Increase your income. ...
  4. Tip #4: Start an emergency fund – even if it's just pennies. ...
  5. Tip #5: Be patient.

How to get rid of $40,000 credit card debt? ›

Options For Paying Off Substantial Credit Card Debt. There are a number of strategies to pay off large amounts of credit card debt. They include personal loans, 0% APR balance transfer cards, debt settlement, bankruptcy, credit counseling and debt management plans. You may be able to use more than one of these options.

How do I stop living paycheck to paycheck? ›

Remember your why.
  1. Get on a budget. First things first. ...
  2. Take care of your Four Walls first. When you first set up your budget, you write down your income. ...
  3. Cut extra expenses. ...
  4. Start an emergency fund. ...
  5. Ditch debt. ...
  6. Increase your income. ...
  7. Live below your means. ...
  8. Save up for big purchases.
Apr 23, 2024

Does the government offer debt relief? ›

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief.

Is debt relief legit? ›

If a debt relief organization you're considering demands upfront payment, guarantees to settle your debts for a fraction of what you owe, refuses to send free information about its services, or promises to stop all debt collection calls and lawsuits, steer clear. Those are red flags that indicate a possible scam.

What is a hardship for debt? ›

Demonstrate a genuine financial hardship: This may include job loss, reduced income, medical expenses or other unexpected financial emergencies. Provide documentation: Cardholders will need to submit proof of their financial hardship, such as pay stubs, medical bills or unemployment documents.

Which method is best to pay off debt the fastest? ›

The "snowball method," simply put, means paying off the smallest of all your loans as quickly as possible. Once that debt is paid, you take the money you were putting toward that payment and roll it onto the next-smallest debt owed. Ideally, this process would continue until all accounts are paid off.

What is a trick people use to pay off debt? ›

Consider the snowball method of paying off debt.

This involves starting with your smallest balance first, paying that off and then rolling that same payment towards the next smallest balance as you work your way up to the largest balance. This method can help you build momentum as each balance is paid off.

What's the smartest way to get out of debt? ›

Try the debt snowball or avalanche method

You can start to see progress while paying off the lowest balances first, then move on to the next. The debt avalanche method saves money on interest when you pay the minimum on all debts while putting extra funds toward the balance with the steepest interest rate.

How to get out of $10,000 debt fast? ›

7 ways to pay off $10,000 in credit card debt
  1. Opt for debt relief. One powerful approach to managing and reducing your credit card debt is with the help of debt relief companies. ...
  2. Use the snowball or avalanche method. ...
  3. Find ways to increase your income. ...
  4. Cut unnecessary expenses. ...
  5. Seek credit counseling. ...
  6. Use financial windfalls.
Feb 15, 2024

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