How to Create a Debt Repayment Plan That Works

Step 1: Know What You Owe

Start by listing:

• Total balances for each debt.
• Interest rates (APR).
• Minimum monthly payments.
• Due dates.

Pro Tip: Use a spreadsheet or a free debt tracking app to organize this information.

Step 2: Choose a Repayment Method

Two popular strategies:

• Debt Snowball: Pay off the smallest balance first for quick wins and motivation.
• Debt Avalanche: Pay off the highest-interest debt first to save money on interest.

Which is best?

• Snowball = psychological boost.
• Avalanche = financial efficiency.

Step 3: Set a Realistic Budget

• Allocate extra funds toward your chosen priority debt.
• Cut unnecessary expenses to free up cash.
• Automate minimum payments to avoid late fees.

Step 4: Consider Consolidation

If you have multiple high-interest debts:

• Personal Loan: Combine debts into one payment at a lower rate.
• Balance Transfer Card: Introductory 0% APR offers can help if used wisely.
• Home Equity Loan: For homeowners with significant equity (use cautiously).

Step 5: Track Progress

• Use apps like Undebt.it or Debt Payoff Planner.
• Review monthly to stay motivated.
• Celebrate milestones—every paid-off account is a win!

Step 6: Avoid New Debt

• Pause unnecessary credit card use.
• Build an emergency fund to prevent relying on credit for unexpected expenses.
• Monitor your credit score for improvement.

Free Tools to Help

• Debt Calculators: Estimate payoff timelines.
• Budgeting Apps: Mint, YNAB for expense tracking.
• Credit Monitoring Services: Stay informed as your score improves.

Action Steps

• List all your debts today.
• Choose your repayment method (Snowball or Avalanche).
• Automate payments and start tracking progress.

A debt repayment plan isn’t just about numbers—it’s about creating a strategy you can stick to. With clear goals, smart tools, and consistent effort, you can make 2026 the year you take control of your finances.

Explore our debt management resources and speak with an advisor to create a personalized repayment plan today.