How to get out of debt, step by step
A clear plan beats willpower. These steps work for credit cards, personal loans, car loans, and medical debt.
- List every debt. Write down the balance, APR, and minimum payment for each one. Enter them in the calculator above.
- Find your extra payment. Review a month of spending and pick an amount you can pay above your minimums every month.
- Build a small emergency fund. Even a modest cushion helps keep surprise expenses off your cards.
- Choose a method. The avalanche saves the most interest; the snowball gives quicker wins. See the comparison.
- Lower your rates where you can. Ask issuers for a lower APR, or consider a balance transfer or consolidation loan if it truly costs less.
- Stop adding new debt. Pay with debit or cash while you pay down balances.
- Automate and track. Set up autopay for minimums and revisit your plan monthly. Put raises and windfalls toward your target debt.
- Get help if you're struggling. A nonprofit credit counselor can review your budget and options, often for free or a low fee.
Frequently asked questions
How long does it take to get out of debt?
It depends on your balances, rates, and payment. Enter your debts in the calculator to get your debt-free date.
Should I save or pay off debt first?
Many people keep a small emergency fund while paying off high-interest debt, so unexpected costs don't go on a card. If your employer matches retirement contributions, consider contributing enough to get the full match.
Is debt settlement a good idea?
Settlement can reduce what you owe but often damages credit, may involve fees, and forgiven amounts can be taxable. Consider credit counseling first.
Related tools and guides
Not financial advice. Results are estimates for educational purposes. Talk to a qualified professional about your situation. Some links are affiliate links; see our disclosure.