How to get out of debt

If you have more than one debt to manage, it can be hard to know where to start. But getting back on track is easier when you take things one step at a time.

This guide breaks it down into simple steps to help you feel more in control.

From working out exactly what you owe to finding the right repayment strategy, we’ll walk you through your options. We’ll also show you where to find free, impartial support in the UK if you need it.

In this article we cover:

How to understand and prioritise your debts

Creating a budget for debt repayments

Ways to lower your interest rates

Increasing your repayment frequency

Choosing a debt repayment strategy

Where to find debt assistance in the UK

Frequently asked questions

Listing any debts you owe can help you figure out the best way to pay them off. When you’re juggling multiple payments, it is easy to feel overwhelmed. However, prioritising your debts can help you feel me in control of your money and future.

Before you can make a plan, you need a clear picture of what you owe. Make a list of all your debts. This list should include:

This simple step will help you prioritise paying them off. There may be some debts where you can increase how much you are repaying. Make sure there are no early repayment charges for doing so.

You will need to make sure you are meeting the minimum repayments on all your accounts.

Create a budget to review your spending and assess how much you have available to repay each month. If you can, look at any areas where you could cut back to free up more money. 

Use our budget planner to help. 

If you have a credit card, it’s good to go beyond the minimum repayment and pay off as much as you can each month. Ideally, the whole balance if you can. If you have a personal loan, you may be able to negotiate with your lender to increase your repayment amounts. Make sure to factor any overpayments into your budget.

Explore: How to manage bills

If you’re able to, see if you can reduce the amount of interest you’re paying. For example, consider moving existing credit card debt to a balance transfer credit card with a lower or 0% interest rate.

If you’re able to pay off the full credit card balance in the introductory period, it can help you pay less interest overall. The interest rate will rise when the introductory period ends, so make sure you’re able to clear the debt before this happens. 

Explore: How balance transfer credit cards work

If you’re making monthly repayments of a set amount, you could increase this to fortnightly to help you repay the debt quicker. You’ll have more flexibility on a credit card but may be able to increase your repayment frequency on a personal loan too.

If you have a credit card, you can divide your usual monthly repayments by 2 and start paying that amount every fortnight instead.

So, if you’re currently paying off £100 per month in 12 instalments, you’ll repay £1,200 over a year. But if you make 26 fortnightly payments of £50, you’ll repay £1,300 over a year. 

If you have a personal loan, you could set up a standing order to pay a certain amount at the mid-point of the month. This would be on top of your regular monthly repayment. 

For example, £20 extra per month will mean you pay off an additional £240 over a year. You may need to check with your loan provider if you’re able to do this.

There may be certain times when you come into a bit of extra money. Perhaps you get an unexpected refund, receive a bonus at work, or have some left over at the end of the month. 

If this happens, and you can make overpayments without any charge or penalty, you could use that spare money to repay your debt faster.

Keep in mind that there may be a charge to make overpayments on some personal loans. Always check the terms and conditions to make sure it’s financially worthwhile.

Once you know how much you have available for repayments, make a plan using one of the methods below.

Typically, a cost-effective option is to repay the debt with the highest interest rate first, as it’s charging you the most to borrow the money.

List your debts in order of interest rate, going from highest to lowest. Prioritise paying the debt at the top, working your way down the list over time. 

Remember that you’ll still have to meet the minimum repayments on all your debts.

While it may not be the most cost-effective method, some people prefer to pay off their smallest debts first. This approach may allow you to quickly reduce the number of debts you have to think about. This can provide a psychological boost and a sense of momentum. 

If you feel this may suit you, make a list of all your debts with the smallest debt at the top and the largest debt at the bottom. Prioritise paying the debt at the top, working your way down the list over time. 

Again, you’ll still need to meet the minimum repayments on all your debts.

If you’re finding juggling multiple debts too stressful, a debt consolidation loan can be a way to simplify your repayments and get back on track.

A debt consolidation loan merges debts, giving you:

This can help make managing your debts feel less stressful. However, it’s important to work out if it'll mean having to repay more on a monthly basis and over the course of the loan. 

The amount you borrow, loan term, and interest rate will determine how much interest you have to pay over time. You can use our calculator to estimate how much this could be.

Explore: What is debt consolidation?

Whatever method you choose, try to repay as much as you can each month to reduce the amount of interest you’re charged.

If the amount you have available isn’t enough to meet your repayment terms, you may be able to make arrangements with your lending providers to make things more manageable. Remember, if your debts do feel too much, you can always get in contact with either your bank or government services for help. If you're an HSBC UK customer, please reach out to us directly. We are always here to help you find a manageable path forward.

Organisations like StepChange, Citizens Advice, and MoneyHelper offer helpful, impartial support for anyone struggling with financial worries.

The cheapest option is usually to pay off the debt with the highest interest first, while you keep making the minimum payments on the rest. If you need quick wins to stay motivated, you can pay off your smallest debts first instead. You can often cut your interest by moving your balance to a 0% balance transfer credit card. This lets you pay off what you owe without paying extra interest for a set time.

If you apply for a new loan to combine your debts, the lender will do a hard credit check. This can cause a small, short-term drop in your score. But if the loan helps you pay on time each month, your score may improve over time.