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How to Cut Your Debts

When looking to cut any existing debt it is best to face debt head on, without burying your head in the sand.

Make a list of all existing debt, from loans to credit cards. Which is your largest debt? Are any of your loans coming off an introductory term to a more punitive rate?

Debt consolidation

You will usually find that a larger loan carries a lesser rate of interest than a small loan, so look at consolidating any loans you may have into one larger loan.

This should make your overall repayments cheaper, plus making it more convenient in only having to deal with one creditor.


The longer the loan term the more you will pay back just in interest payments, so try to make overpayments to reduce the loan term and your overall costs.

Make sure there are no penalties for paying back the loan early though, as some lenders charge fees to repay early, negating any possible savings.



If you have a mortgage, could you get a better rate? Check online or speak to a mortgage broker. Usually our largest debt, refinancing your mortgage could save you thousands.

Credit cards

If you have credit card debt, then look at moving that debt to a 0% introductory rate credit card, with the aim of paying the loan off before the rate reverts to the norm.

Although it is always prudent to have enough savings for a rainy day, remember that you are almost certainly receiving less interest on your savings than the interest you are paying on your borrowing, so make paying down your debt a priority.