Being in debt is common and there is no shame attached to it. Anyone can go into debt at some point in life, including the rich. Not all debts are bad; some debts can be taken for your investments such as a home or plot, and some can be unavoidable such as medical emergency or mandatory financial obligations. Whatever they may be, it requires a meticulous financial strategy to pay them off without any hassle. Here we have listed out 7 strategies that can work best for anyone who is debt-ridden.

#1. Prioritize Debts That Affect Your Credit Score

Loans taken from banks, NBFCs or online lenders; and credit card bills are directly linked to your credit score. These payments should be your priority as any default can affect your credit score. Make your payment on time and plan your budget in a way that sufficient funds are allocated towards all such repayments. Ensure your credit history remains positive in order to avail better terms on future loans. 

#2. Debt Consolidation for Easy Repayment

It’s always better to deal with one big problem than multiple small problems. It gives you clear focus to manage your debts more effectively. When you have multiple credits, you can take out one big loan to consolidate all of them. From now on, you can start repaying to just one lender at a convenient EMI.

Unifying all debts is a good option especially when you have a bad credit and look forward to getting out of it. Moreover, debt consolidation helps you escape the thoughts of managing multiple debts, which in turn gives you peace of mind and more time to focus on your financial future.

When a lender agrees to give you a big loan for consolidation, the full amount is not offered. The lender provides you up to a certain percentage of the overall debt which generally ranges between 70% to 80%. The rest of the amount must be arranged by you.

#3. Avoid Making Minimum Due Payment On Your Credit Card

The credit card issuers allow you to make minimum due payment of 5% of the total outstanding amount towards your credit card bill payment. The remaining amount will be carried forward to next month with interest. If you continue to make minimum due payment and use your credit card month on month for all transactions, the debt may rack up significantly higher, pushing you in debt trap.

It is wiser to make the payment in full and then use your credit card for transaction during the next month. This way your credit score will remain intact, and you can avoid paying unnecessary interest.

#4. Consider Using Cash Instead of Cards

Plastic money in the form of debit card, credit card and EMI card have replaced cash to a great extent. The banks and NBFCs try to woo the customers with offers, discounts and rewards for using such cards for various transactions. Online cashless transactions are increasing day-by-day with the growth of e-commerce merchandise. Though they have undeniable benefits and enable the people to conduct the transactions with ease, these options are not best suited for individuals who have debts.

Carrying cash will keep you in good control against unwanted and unnecessary spends. Moreover, you would think twice before taking out cash from an ATM or bank.

#5. Stop Taking New Debts

When you do not have cash or money in your bank account, you tend to use your credit card or take a personal loan to purchase things you want. Though certain items may be essential, it leads to spending more than you will be able to repay. It adds more debts to your existing debt portfolio. Breaking free from such impulsive behaviour can reduce your debt burden.

#6. Make A Budget

A budget is simply a plan for spending your money. Having a budget in place before you start spending your money will help manage your income more effectively. You can avoid lavish purchases and focus on things that are most important.

Planning your budget requires a careful analysis of important needs, existing debts and savings. Based on these three aspects, you can create a budget and stick to it.

There are applications specially designed to keep a track on your budget and expenses. You can download them and keep tabs on your transactions.

#7. Pack Your Lunch

This may not sound like a debt-free habit, but it can certainly help you save plenty. Eating out has become quite expensive. People order food from their workplace which is even costlier. Though buying or ordering food provides you the sophistication, it can eat up most of your hard-earned money which can very well be used for paying off your debts. You can also avoid dining out often until you have repaid all your debts successfully.

Additional Reading: 7 Simple Tips for Getting Out of Debt


“Do not save what is left after spending; instead spend what is left after saving” – Warren Buffet

This saying holds immense value, and it is the best practice that needs to be adapted to have a prosperous financial life. Stay away from unnecessary expenses until you repay your debts. Bad habits such as smoking, excessive drinking, gambling can waste your money and push you in more debt. Quit all such habits and concentrate on increasing your wealth step by step.