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Key takeaways
- Know your numbers: balances, rates and minimums for every debt
- Always pay the minimum, then direct extra money to one target debt
- Avalanche saves the most interest, snowball gives quick wins
- Compare the total cost before using a balance transfer or consolidation loan
- Keep a small emergency fund and avoid taking on new debt
If you can afford your debt repayments and want to be free of them sooner, a few well-chosen strategies can save you hundreds or even thousands of pounds in interest and cut years off your repayment time. This guide is for people who are managing their debts and want to speed up. If you are struggling to pay even the minimums, start with our guide on what to do if you cannot pay your debts and get free advice first.
Start with the facts
List every debt with its balance, interest rate (APR), minimum payment and any fees. Add up the total and the monthly minimums. This is the baseline against which every other strategy is measured. A free tool such as our debt repayment calculator shows how long your current payments will take and how much interest you will pay.
Always pay at least the minimums
Missing a minimum payment can trigger late fees, damage your credit record and sometimes cancel a promotional interest rate. Whatever strategy you use, keep the minimum going on every debt, and set up direct debits so you never miss one.
Choose a strategy: avalanche or snowball
The two most popular methods differ in which debt gets the extra money first.
Once a debt is cleared, take what you were paying on it and add it to the payment on the next. This "rolling" effect speeds up the process considerably. With the avalanche method, you normally pay the least interest overall. The snowball method may cost slightly more but gives early victories, which many people find helps them stick to the plan. The best method is the one you will follow.
| Method | How it works | Best for |
|---|---|---|
| Avalanche | Put all spare money towards the debt with the highest interest rate | Saving the most interest |
| Snowball | Put all spare money towards the smallest balance first | Quick wins and motivation |
Find extra money to put towards debt
Even small extra payments make a big difference because they reduce the balance on which interest is calculated. Look for money in these places:
- Spending: Review three months of bank statements. Subscriptions, takeaways and unused memberships are the easiest to cut.
- Bills: Switch or renegotiate energy, broadband, mobile and insurance when contracts end.
- Income: Overtime, a side job, selling items you no longer need or claiming benefits you are entitled to.
- Windfalls: Tax refunds, bonuses and gifts can make a large dent in a balance.
Our guide to cutting household bills has practical ideas.
Consider cheaper borrowing carefully
Moving debt to a lower interest rate can speed repayment, but it needs care.
Balance transfer cards
A 0% balance transfer credit card lets you move credit card debt for a promotional period, usually with a transfer fee of a few per cent. If you can repay the balance before the offer ends, it can save a lot of interest. Read our guide to balance transfer cards first, including what happens when the deal ends and the effect on your credit file.
Consolidation loans
A debt consolidation loan combines several debts into one, often with a lower rate and a single payment. It only helps if the new loan costs less overall, which means comparing the total amount repayable, not just the monthly payment. Stretching a loan over a longer term can reduce the monthly payment while increasing the total cost.
Pay at the right time
Where you can, pay more often or earlier in the month. Interest on credit cards is calculated daily, so lowering the balance sooner saves a little extra. Some loans allow overpayments without charge, up to a limit, and some mortgage deals allow overpayments of around 10% a year. Check the terms for early repayment charges before overpaying.
Keep a small safety net
It may seem odd to save while you owe money, but a small emergency fund stops an unexpected bill from going back on a credit card. Many people aim for a few hundred pounds first, then focus on debt, and then build the fund to a month or more of essentials. Our guide to building an emergency fund explains how.
Avoid new debt
The surest way to stay in debt is to keep adding to it. Try to leave cards at home, delete saved card details from shopping accounts, and use a plan for irregular costs such as Christmas and car repairs.
Common traps to avoid
Some well-meant moves can backfire. Paying more than the minimum on a debt with a 0% promotional rate, while carrying a 25% balance elsewhere, wastes money that could have cleared the expensive one. Borrowing from a new lender to pay off an old one without checking the cost can leave you worse off if there are fees. Using a long, interest-only payment period may cut your monthly bill but leave the balance untouched. And draining every pound of savings to clear debt can leave you exposed to a car breakdown or a boiler repair, which then goes on a credit card. A short checklist helps: is the new rate really lower, what are the fees, can I keep up the payments if my income dips, and am I closing the old accounts or leaving them tempting?
If a debt is more than you can manage, it is better to ask for help than to push harder. Struggling to meet even the minimums is a signal to talk to a free adviser, not to find a clever strategy.
Track and celebrate progress
Check your progress monthly. Seeing balances fall is motivating, and marking milestones, such as clearing your first debt, helps you keep going. Review your plan every few months and update it if your income or interest rates change.
Frequently asked questions
Should I pay off debt or save?
Is it better to pay off the smallest or the most expensive debt first?
Will paying off debt early hurt my credit score?
Can I ask my lender to lower my interest rate?
Sources and further reading
- Dealing with debt — MoneyHelper
- Options for paying off your debts — GOV.UK
- Financial Conduct Authority consumer guidance — Financial Conduct Authority
This page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.
Written by
MoneyBrink Editorial Team — Editorial team
The MoneyBrink Editorial Team researches, writes and reviews every guide on this site. We work from official UK sources such as GOV.UK, the Financial Conduct Authority, MoneyHelper and the Money and Pensions Service, explain things in plain English, and update articles when the rules change. We do not sell financial products and we do not give personal advice.
Read how we research and check our guides in our editorial policy.
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