Debt is a reality for millions across the UK — from student loans and credit cards to car finance and overdrafts. While debt itself isn’t inherently bad, unmanaged or growing debt can quickly become stressful, overwhelming, and financially damaging.
The good news? Debt doesn’t have to define your financial future. Whether you’re juggling multiple repayments or simply want to pay off a lingering balance faster, there are clear steps you can take to get back in control.
Understanding Debt: The Good vs the Bad
Not all debt is created equal. Some debt can be useful — even necessary — in certain situations. For example:
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A mortgage helps you buy a home and may increase in value over time.
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Student loans in the UK have unique repayment rules and are often considered “income-contingent”, not traditional debt.
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Business loans can be a smart investment if they generate more income than they cost in interest.
The problems arise with bad debt — high-interest credit cards, payday loans, or persistent overdrafts that grow faster than you can pay them down. These types of debt often come with expensive charges and can spiral if not addressed early.
Step 1: Face the Numbers
The first and hardest step is often to stop avoiding the problem. Make a list of every debt you owe, including:
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Lender or provider name
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Total amount owed
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Minimum monthly payment
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Interest rate (APR)
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Due dates
Add everything — from Buy Now, Pay Later accounts to overdrafts and unpaid bills. The full picture might be uncomfortable, but it’s crucial to know where you stand.
Step 2: Understand Your Priority Debts
In the UK, some debts are more urgent than others — not because they’re the biggest, but because of the consequences of not paying.
Priority debts include:
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Rent or mortgage arrears (you could lose your home)
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Council tax (non-payment can lead to court action or bailiffs)
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Energy bills (disconnection or prepayment meter installation)
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Court fines
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Child maintenance
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TV licence
These should always be paid first, even before unsecured debts like credit cards.
Step 3: Build a Budget
Create a monthly budget that includes all your income and spending. Look for areas to cut back — even temporarily — to free up cash for debt repayments.
Use any surplus to tackle your debts more aggressively. Budgeting apps like Emma or Money Dashboard can help you track spending and spot leaks.
If you’ve no money left over after essentials, you may need professional help (more on that below).
Step 4: Choose a Repayment Strategy
There are two popular ways to pay down debt efficiently:
1. Snowball Method
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Pay off the smallest debt first while making minimum payments on the rest.
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Once that’s gone, move to the next smallest.
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Great for motivation, as you get “quick wins”.
2. Avalanche Method
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Focus on the debt with the highest interest rate first.
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This saves the most money in the long run.
Both strategies work — choose the one that suits your mindset best. The key is to stay consistent.
Step 5: Consider a Balance Transfer or Consolidation
If you have good credit, a 0% balance transfer credit card can help consolidate your debts and reduce interest. These deals let you move existing credit card balances onto a new card with an interest-free period (usually 12–24 months).
Be sure to:
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Check if there’s a transfer fee (usually 2–3%)
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Pay off the balance before the 0% period ends
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Avoid new spending on the card
Alternatively, a debt consolidation loan might work if you prefer one monthly payment and a fixed repayment term — but make sure the interest rate is lower than your existing debts.
Step 6: Avoid Common Pitfalls
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Only paying the minimum: This keeps you in debt much longer and racks up interest.
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Borrowing more to stay afloat: This often worsens the problem. Stop using credit to pay credit if possible.
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Ignoring letters or calls: It won’t make the debt disappear. In fact, early communication with lenders can lead to more manageable repayment terms.
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Letting emotions drive decisions: Guilt, shame or fear can cloud your judgement. Focus on the facts and take action step by step.
Step 7: Get Help if You Need It
If you’re struggling with repayments or can’t see a way forward, there is free, confidential help available in the UK. Reaching out early can stop the problem from growing.
Trusted sources include:
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StepChange – Free debt advice and plans
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Citizens Advice – Budgeting help, legal rights, and benefit checks
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National Debtline – Helpline and online tools
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Christians Against Poverty (CAP) – Free debt coaching and budgeting support
Avoid commercial debt management companies that charge fees — free help is often better and just as effective.
Step 8: Stay Debt-Free
Once your debts are paid off, stay mindful of how they started. Build an emergency fund, set up savings pots for irregular expenses, and review your budget monthly.
Keep credit use intentional — for example, using a credit card for cashback or protection (Section 75), then clearing the balance each month.