3 tips to pay off debt now

If you’re experiencing the burden of debt, then this article will share 3 tips to pay off debt now. These are practical tips you can implement now.

1. Prioritise

The first thing you need to do is understand what debt you owe. This begins by documenting everything that you owe. To help you with this, I have created a free worksheet which you can download here. Once you’ve completed this exercise, you can begin to develop a methodology on how to rank your debts for attention.

The first thing to consider when ranking your debt is the interest rate being charged. Interest is typically shown as an Annual Percentage Rate (APR). Identify which of your debts has the highest APR and prioritise those for first assault. Rank everything else in descending order.

2. Identify money to allocate

In order to pay off debt, you have to have some money to throw at the problem. This means you need to have a clear view of your surplus income. If your finances are led by a budget then you should have this already. If you don’t have a budget, you can download my free-spending planner here.

Once you’ve identified your surplus income, you need to decide how you will allocate the money to your debt focussing on your highest interest debt first. Typically, your high-interest debt will be overdrafts, credit card and payday loans.

It is possible that you find yourself in a position where you have limited surplus income. Remember, small amounts add up over time, so don’t feel as though you’re not doing enough if you’re working with a tight budget.

3. Automate your debt repayments

The final of my 3 tips to pay off debt now is automation. Automation is your best friend. Luckily, with all the resources available to us it’s easy to automate payments. This will the possibility of missing payments and you don’t have to do it yourself every month. The best way to automate your payments is via standing order or direct debit.

Now that the 3 main tips are out of the way. Here are some specific practical tips for the different types of debt you might have.

Credit Cards/Store Cards

  1. As previously mentioned, attack the highest interest card first. Really make a concerted effort to throw as much as you can afford at this card. Once you gain momentum you will quickly see progress. If you hold more than one card, remember to continue making payments on the others. Once the first card is paid off, repeat again until none are left.
  2. 0% Balance transfers. You need a good credit file and a clean repayment history for this, but it can help you pay off your credit card debt in no time. Best practice in this scenario is to pay more than the minimum monthly payment. This will help you to build some momentum and don’t forget to destroy the card from which you transferred the balance.
  3. Once you implement your strategy, keep the cards your paying down out of reach. Don’t give yourself the temptation of reusing the card and adding additional debt.


Most banks are now charging up to 40 per cent per annum for overdrafts. To read more about this click here. An overdraft can feel you with dread when you look at your account balance, well, it certainly did with me. These can be notoriously difficult to reduce because of the banking system so here’s a tip.

Build funds in a separate account until you have enough to repay the overdraft in full.

Discipline is key, so best practice would be to open an account that doesn’t offer an ATM card so you have restricted access to it. Automate payments to this account, after the second month, you won’t notice this money being diverted.

Personal Loans/Car Finance Agreements

Personal loans and Car Finance Agreement are more easily managed than credit cards. With each of these, you have a fixed term and a fixed monthly payment you can work with that provides a light at the end of the tunnel feeling.

With both of these, you will have the option to make overpayments to shorten your term and reduce the amount of interest you pay in the long run. This will vary depending on your lender, but it’s worth having an open dialogue with them to understand your options and how much you could save in interest.


Your biggest, most expensive and arguably your longest financial commitment.

Like personal loans, you will have the ability to make overpayments. This will likely be a percentage of either your outstanding balance or original mortgage amount. The distinction between your outstanding balance or original mortgage amount can be quite significant, so check with your mortgage provider for clarity.

It’s worth noting, you can pay whatever amount you want off your mortgage at any time, however, your mortgage provider will likely levy a penalty charge for loss of interest.


Consolidating your debt means wrapping all your debt into one payment. You can do this in 2 ways.

Personal Loan

An example of this would be wrapping balances from three credits into a personal loan. In order to explore this option, you must have clean credit with no missed or late payments. You will also be required to pass an affordability assessment with your lender.

When you consolidate you are likely to move to a lower interest rate which can significantly reduce your monthly cost. This coupled with a fixed term means that you get a clear path to being debt-free. If you are worried about your credit score, watch the following video on how you can improve it here.


To consolidate debt onto your mortgage you must have clean credit with no missed or late payments. You also need enough equity in your property for this to work.

Typically mortgage rates are much lower than the rates you get on a personal loan, meaning it’s a great option if you really want to reduce your outgoings. However, with a mortgage, it’s likely you are borrowing over a longer-term than a personal loan, which means you will likely pay more interest in the long run.

If you’re considering consolidating on to a mortgage be sure to see a qualified mortgage adviser or speak with your mortgage lender.

In closing

If you are goal is to pay off debt now, you have to be decisive and committed. It will be painful initially and it may entail some sacrifices, but remember your end goal. If you’re in a position where your debts are unmanageable, or you are receiving calls from debt collectors then you must not bury your head in the sand. Speak with your creditors and seek professional advice.

Click here to contact a regulated debt counsellor.

Those were my 3 tips to pay off debt now, to listen to my podcast click here and you watch my Youtube video on this click here

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