Debt Reduction Guide

1. Inventory

List every debt: balance, minimum payment, interest rate, due date and lender. Include credit cards, auto loans, student loans, personal loans, BNPL balances, medical debt, family loans and any mortgage or HELOC.

2. Stabilize

Make every minimum payment on time. Late and missed payments damage credit, trigger penalty rates and compound the problem.

3. Build a small buffer

A modest starter emergency fund prevents new debt when a small surprise hits.

4. Choose a payoff order

• Avalanche — pay extra toward the highest-interest debt first. Mathematically optimal.
• Snowball — pay extra toward the smallest balance first. Behaviorally motivating.
• Hybrid — knock out one small balance for momentum, then switch to avalanche.

5. Evaluate consolidation carefully

Balance-transfer cards, personal loans and HELOCs can lower the interest rate but often introduce fees, teaser-rate cliffs and new collateral risk. Compute the true all-in cost before consolidating.

6. Address the inflow

Without changes to spending or income, debts return. Pair a payoff plan with a written monthly budget.

Educational, not advice

This guide is general financial education. It is not personalized advice, debt counseling or a recommendation about any specific lender, product or strategy.