Debt payoff feels overwhelming, but the right method can cut years and thousands in interest. This page gives a clear, math-backed plan for paying off debt, even on a low income.
List all debts by interest rate, highest first. Pay the minimum on every debt except the highest-rate one, and put all extra money toward that debt. Once it's paid off, roll that payment to the next highest rate. This saves more interest than any other order.
Aim to free up at least $100–$200 per month by cutting subscriptions, eating out less, or selling unused items. Even $50 extra per month can shorten a $5,000 debt by over a year. Automate the extra payment so you don't skip it.
If income is tight, focus on building a $500 emergency fund first to avoid new debt. Then negotiate lower interest rates with creditors—a 5% rate cut on $10,000 saves about $500 per year. Consider a side gig for 10 hours a week to add $400+ monthly.
The biggest mistake is paying extra on multiple debts at once, which dilutes impact. Focus all extra money on one debt at a time to build momentum and save the most interest.
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At $500 per month, about 20 months; at $1,000 per month, about 10 months, assuming a 15% interest rate. Faster with lower rates or higher payments.
Keep $500–$1,000 in emergency savings, then use extra savings to pay high-interest debt (above 7%). This balances safety and interest savings.
Contact creditors immediately to negotiate a lower payment or hardship plan. Missing payments damages credit for up to 7 years, so act before due dates.
A focused answer for your age band and constraints, not general advice.
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