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How to Get Out of Debt Fast in 2026: A Step-by-Step Guide

How to Get Out of Debt Fast in 2026: A Step-by-Step Guide

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August 11, 2025

Whether you’re struggling with high-interest credit cards or personal loans, 2026 is the year to take control. If you're searching for how to get out of debt fast, this guide breaks down 9 powerful, expert-backed strategies — from DIY budgeting to smart consolidation. No fluff, just real solutions that work.

However, the right strategies to pay off your debt depend on your situation. This guide covers how to pay off debt by evaluating your finances and identifying the methods that'll get you out of the red.

What You'll Learn in This Guide

How to take control of your debt in 2025
9 strategies to pay off debt faster
Key differences between consolidation, settlement & bankruptcy
When to seek help from a financial adviser

How to Pay Back Debt Faster: Tips and Strategies

Looking for effective debt repayment strategies? Here are 9 proven tips to help you pay off debt faster — whether you're handling credit cards, personal loans, or multiple balances at once.

1. Take Inventory

Before you get started, creating an inventory of your current debts is a good idea. This step gives you a complete picture of where you stand and helps you identify payoff strategies. To take a debt inventory:

Create a list of all outstanding balances. Make sure to include the creditor's name, current balance, interest rate, monthly payment amount and due date, and other important details.
Calculate your total debt load. Add up all the balances to fully understand how much you owe.
Keep updating your list. You should update your debt list periodically and at key moments, like when you pay off an account.

2. Create a Budget

A budget tracks your monthly income and compares it against your outgoing expenses. Creating one helps you pay your debt off faster by helping you look for ways to reduce your spending and allocate funds toward debt repayment. To make a budget:

Download a budget app or create your own budget using a simple spreadsheet.
Plug in your income and then create a line item for all your obligations, including your debts, bills, and monthly expenses like groceries.
Subtract the outgoing cash flow from the incoming cash flow to see how much money you have left to work with.

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The first place to start for any debt payoff is a budget. You need to know where your money is going. It also helps to put your finances in order. When you are accruing debt, it can be difficult to determine exactly how much you are spending each month. A budget also will help you figure out if you need to cut expenses or increase your income to realistically pay off debt.

– Ashley Morgan, debt and bankruptcy attorney at Ashley F. Morgan Law, PC

Remember that your budget is a living document that can change as your income and expenses change. Make sure to adjust it as needed.

For example, if you decide to cook at home more to save money, adjust your monthly dining out and grocery expenses accordingly.

3. Pay More Than the Minimum

This step may seem obvious, but it’s one of the most effective ways to pay off credit cards faster — even if you’re on a tight budget. If you’re wondering how to pay off credit cards without extra money, small changes to your payment schedule or habits can make a big impact. Refer back to your budget to allocate additional funds toward specific debts. You can use the following tricks to pay more than the minimum:

Make a small payment each time you get paid, instead of once a month, to find a little extra debt repayment money in your paycheck.
Sign up for automatic payments with your creditors (if it makes sense for your cash flow) with a payment amount above the minimum so you don't have to think about it.
Look for extra ways to save, such as buying discounted food at the grocery store, and allocate those savings toward your monthly payments.

4. Prioritize Your Debts

If you're looking for the best way to become debt free, one of the most effective strategies is to prioritize your debts. Common methods include the debt snowball and the debt avalanche method. Here’s how both work:

Debt snowball method. Put extra funds toward the smallest debt on your list, and make minimum payments on the rest until the smallest debt is paid off. Then, move on to the next smallest debt on the list. This method gives you some quick victories by eliminating debts faster and helps you reduce the number of monthly payments.

Debt avalanche method. Put extra funds toward the highest-interest debt on your list, and make minimum payments on the rest until the high-interest debt is paid off. Then, move down the list to the debt with the next highest interest rate. This method saves you money in interest in the long run.

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The debt avalanche method focuses on paying high-interest debts first to minimize overall interest, while the snowball method prioritizes paying smaller debts first to build momentum. The debt avalanche method will result in paying the least amount in overall interest. Often professionals recommend the snowball method since seeing progress early on will help keep people motivated. People often feel better when they see progress in the beginning.

– Morgan of Ashley F. Morgan Law, PC

There are other ways to prioritize your debts. For example:

If you have past due payments, focus on catching up on those to avoid damaging your credit.
Focus on the debt with the highest monthly payment first to free up room in your budget.
Pay off debts from creditors with whom you've had poor customer service experiences to get free of them.

Whatever you decide, prioritizing your debts can help you get organized and establish a framework for repayment.

5. Negotiate Your Debts

Debt collectors and creditors may feel motivated to settle for a lower payoff amount or arrange a long-term repayment plan when the alternative is a prolonged collections process that takes time and money.

If you are having trouble paying your debts, you can try negotiating with your creditors using the following steps:

Gather information about your debt, including the amount you owe and your payment history.
Contact your creditors or debt collectors to inform them that you’re having trouble paying your debt and ask for an alternative solution.
Attempt to negotiate a lower payoff amount or a repayment plan with friendlier terms, but remember you may need several conversations before reaching a deal.
Get any agreement you make with your creditors in writing. Make sure you adhere to the new terms of the agreement.

6. Consolidate Your Debt

Debt consolidation is a common strategy that involves combining multiple debts into a single balance with one monthly payment, ideally with a lower interest rate. This option can help you simplify your debt repayment, lower your monthly payment, and even save money on interest.

There are a few common methods for consolidating debt:

Balance transfer credit cards. Open a new credit card with a low introductory annual percentage rate (APR), then transfer your existing credit card balances to the new card. Work on paying the transfers off before the promotional APR expires to avoid the “regular” interest rate. This move helps you pay off your credit cards at a better interest rate, though you might have to pay a fee of 1% to 3% of the transfer amount. Plus, if you don’t pay off the transfers in time, any remaining debt will incur higher interest charges. Compare the best balance transfer credit cards.
Debt consolidation loans. You can take out a debt consolidation loan to pay off your existing creditors in full, then pay back the new lender with one monthly payment. This move allows you to combine your loans with, ideally, a lower interest rate and get a defined amount of time to pay off your debt. But if you aren’t careful and don’t review the loan terms, you could wind up with a higher monthly payment or end up paying more in interest over the course of the loan. Learn more about top debt consolidation loans.
Home equity loan or home equity line of credit (HELOC). Homeowners can borrow against the equity in their home with a home equity loan or HELOC and then use those funds to pay off their existing creditors. But you'll have to give up some of the equity in your home, and the lender can foreclose on your home if you fail to make payments.

7. Consider a Debt Settlement Company

Debt settlement services negotiate with your creditors for you so you don’t have to do any of the leg work. These third-party companies contact creditors on your behalf and attempt to negotiate a lower payoff amount.

If you accept a negotiated settlement, you start paying into an account managed by the company, which will turn around and pay your creditors after taking its cut.

Debt settlement services can help shrink your debt, which can come as a huge relief if you’re struggling to pay it off, but there are several potential downsides.

Debt settlement companies generally advise their clients to stop making payments in order to put financial pressure on the creditors – a move that can have devastating consequences for your credit. These services also can get expensive, and often charge fees of 15% to 25% of the debt enrolled in the program. Plus, there’s no guarantee of success, and the path to repayment can take years.

8. Hire a Financial Adviser

“Getting a professional involved in your situation is not [always] necessary for debt payoff, but there can be benefits,” Morgan says. “If you need someone to keep you accountable or to review your finances, a financial advisor can be helpful. Sometimes I see clients that are [unsure] where they can realistically cut from their budget, so a second set of eyes never hurts.”

Keep in mind that you’ll likely have to pay for a consultation.

9. File for Bankruptcy

Filing for bankruptcy is one way to resolve some of your debts, but it should only be a last resort. Bankruptcy has immediate negative impacts on your credit score, and could make it difficult for you to qualify for credit for years to come. There are two types of bankruptcy:

Chapter 7 bankruptcy involves selling off some or all of your assets to pay your debts, and stays on your credit report for up to ten years.
Chapter 13 bankruptcy involves completing a court-approved repayment plan that lasts three to five years, and remains on your credit report for up to seven years.

“If you cannot reasonably … pay off your debt within three years or so, you may want to consider bankruptcy,” Morgan says. “This is also a potential option when you review your budget and find you can barely cover your minimum payments or you do not have sufficient income to make ends meet.”

Becoming debt free doesn't happen overnight, but it’s absolutely possible with a focused, realistic approach. By following these tips, you can eliminate debt step-by-step, reduce stress, and build a stronger financial future — starting today.

Frequently Asked Questions

What’s the fastest way to become debt-free in 2026?

The fastest way to become debt-free depends on your situation, but combining budgeting with either the debt snowball or debt avalanche method is a strong start. Those with high-interest credit card debt may benefit from balance transfer cards or debt consolidation loans, while others may need to negotiate directly with creditors.

Is it better to pay off credit cards or loans first?

It depends on the interest rates and terms. Generally, it's best to pay off high-interest credit cards first, since they often carry higher APRs than personal or student loans. The debt avalanche method supports this approach. But if you're motivated by quick wins, starting with smaller balances may help you stay on track.

Can I pay off debt if I have no extra money?

Yes — start by creating a budget to see where you can cut expenses or reallocate funds. You may also explore debt consolidation, balance transfers, or negotiating new payment plans with creditors. Even small consistent payments above the minimum can make a difference over time.

Written byBrian Acton

Brian Acton is a seasoned personal finance journalist at BestMoney.com who specializes in loans and debt consolidation. His work has appeared in The Wall Street Journal, TIME, USA Today, MarketWatch, Inc. Magazine, HuffPost, and other notable outlets.