Jun 23

Seven quick ways to pay off debt

Reading Time: 7 mins

A large pile of debt can seem insurmountable, but there are a huge number of ways to approach the problem and, the sooner you start paying off debt, the easier it is to get out of the red.

Follow these seven simple steps to cut outgoings, boost incomings, and use the extra funds to get out of debt.

1. Switch and save
2. Review your TV, phone and broadband bundles
3. Cut your day-to-day expenses
4. Increase your income
5. Make overpayments on your debt
6. Improve your credit rating
7. Cut the cost of your debt

1. Switch and save

Magpie with energy saving bulb and coins growing

There are huge savings to be made by shopping around for your essential household bills, and gas and electricity are two of the big ones.

In October 2016, Ofgem – the government regulator for gas and electricity markets – estimated that consumers who had never switched supplier could save £300 a year by doing so. Use our energy comparison service to see how much cheaper your bills could be. 

Not sticking with the same provider is also the key to saving hundreds on insurance, so don’t auto-renew things like your car insurance, home insurance and breakdown cover – shop around!

Take a look at the competition in the current account market, too. Moving your bank account is easy now that the seven-day switch guarantee is in place.

Current accounts can pay market-leading interest rates, and some will come with benefits such as switching bonuses, cashback on everyday spending and linked savings accounts with attractive rates.


2. Review your TV, phone and broadband bundles

Woman looking at phone bill

Broadband, TV, landline and mobile phone bills can take a huge chunk out of your monthly budget, so start by deciding on what you really need, looking into things like the TV channels you watch, the broadband speed you receive and the number of free minutes on a phone deal.

Remember that the essentials could come through comparatively cheap options such as Freeview or the BBC iPlayer, while if you pay for a subscription service such as Amazon Prime or Netflix you may not also need an expensive satellite or cable TV subscription.

When you’ve pared things down to the essentials, see if you can get what you need at a cheaper price.

You may be receiving all these services from different suppliers, but combining them into a package or bundle can lead to significant discounts.

Even if you have multiple services from one provider, remember that prices will rise over time and that the most attractive deals are typically reserved for new customers.

Look at the options, think about taking advantage of introductory deals with other companies and speak to your current provider –mentioning that you’re thinking of leaving will often lead to a chat with the customer retention department, which could offer you better terms.


3. Cut your day-to-day expenses

Cutting costs graphic

No debt management plan is complete without this classic… taking your lunch to work instead of buying it each day can literally save you thousands of pounds a year.

It’s important to be realistic, though. If you’re the kind of person who’ll leave lunch planning until 10 seconds before you have to go, then open the fridge and feel depressed about cheese, you need to have some tricks up your sleeve, or you’ll soon give up.

If there’s a microwave at work, the easiest option is to cook a little extra each evening, pop leftovers in the freezer, and take them to work the following week. If not, keep your eyes peeled for bargains in the supermarket – try our guide on how to save on supermarket shopping.

While you’re at it, why not cut down on your coffee spend, too? We’ve got more tips on lunchtime savings here.


4. Increase your income

There are hundreds of ways to boost the money coming into your account, many of them requiring very little effort.

You can take a look at our guide on easy ways to make money for a hatful of ideas, but here are just a few to get you started…

Rent out your driveway

Home Driveway

An empty driveway during the day can be used by someone else, making you extra money while you’re out at work.

This is especially lucrative if you live in a commuter area – near a train station or airport for instance, or just outside a congestion charging zone.

It’s free to register on JustPark and you can choose which days and for how long you want to make your drive available.

Make money from your spare room

Bedroom door ajar

Got a spare room? You can make up to £7,500 a year tax-free (as of the tax year 2016-17) from renting it out, so it could be an easy way to help pay the bills.

You can get started with a free advert on or, if you just want someone in the short term, think about Airbnb.

Another option is the website, which specialises in finding rooms for business people who need somewhere close to work for the week, but who go home at weekends.

To find out more about the things to consider, take a look at our dedicated guide to renting out a room.

Cash in on your old mobile

Who’s got an old mobile phone or three knocking round in the spare drawer? Come on, admit it…

If you dig it out and recycle it, you’ll be helping the planet and could make some serious dosh – fairly modern smartphones can be worth hundreds of pounds.


5. Make overpayments on your debt

Someone using their credit/debit card via a laptop

It’s important to make your extra income take effect by being disciplined and using it to pay down your debt, starting with the most expensive debt.

Credit card debt can carry very high interest rates, so try to clear your deficit in full every month, and also beware of bank overdrafts.

Some loans and mortgages can come with more manageable interest rates as such debts are typically expected to be repaid over long terms, but that doesn’t mean you shouldn’t think about overpaying them when you’ve cleared more expensive debt.

Check your terms and conditions first – overpayment and/or early repayment may carry charges. For example, mortgages will often allow you to overpay 10% of the entire debt in a year, but may charge a fee if you try to pay more.

Assuming you don’t have to pay an extra fee, overpaying on loans and mortgages can really eat into your debt, cutting the overall amount you pay in interest and the length of time you’re in the red.


6. Improve your credit rating

Credit Score

Credit reports that are held about you can have a huge impact on your financial life, so learn how to improve them. The methods can be simple and free, such as:

  • Registering on the electoral roll
  • Avoiding multiple credit applications
  • Closing old accounts
  • Not maxing out your available credit

Look at a free version of the credit reports held by the likes of Equifax, Experian and Callcredit – DON’T use their premium services that you have to pay for!

Looking at such reports can help improve your understanding of the rating factors and will allow you to see any mistakes on your record – which you can then work to get corrected.

A healthy credit report can help you to gain access to the most attractive loan deals on the market, which can help you cut the cost of your debt.


7. Cut the cost of your debt

Someone cutting their credit card

The interest you pay on your debts can be crippling, so keeping those rates as low as possible can make a huge difference and help you start cutting the capital you owe, rather than just paying off the interest.

As usual with personal finance, shopping around pays huge dividends… but with things like loans and credit cards you need to know about smart search (also called soft search).

Making multiple applications for credit can damage credit records held on you, but many websites have smart search tools that allow you to see the deals you’re likely to qualify for before you make an official application.

0% balance transfer credit cards

Using smart search, think about looking for a 0% balance transfer credit card – there’s a competitive market for these cards, the length of the 0% interest-free period sometimes lasting well over three years.

Do remember, though, that you’ll have to pay to transfer your debt, the fee being a percentage of the amount you owe.

Above all else, you need to have a plan to pay off – or at least pay down – the debt during the interest-free period. You never know what may happen in the course of the 0% period, and you may not qualify for such an attractive deal again when the current one runs out.

Consolidating your debt

It’s also worth looking into whether you can cut the interest rate you’re paying on a loan, considering options such as consolidating a number of small debts into one larger one.

Whether or not such consolidation is right for you, shop around for the best loan rate using a smart search tool.

Many such tools will include peer-to-peer loans, which can be some of the most attractive on the market (although you’ll need a good credit rating to qualify for the best deals).

As well as personal, secured and peer-to-peer loans, also think about your mortgage.

Remortgaging to a better deal can be a great way to save money, and it may even be worth thinking about consolidating other debt into your new mortgage deal.

This carries its own risks, though, so speak to an expert adviser before considering it.

Moneymagpie has teamed up with London & Country, one of the best independent brokers in the UK – you can speak to one of their mortgage advisers for free, no obligation guidance.


Finally, you can sign up to the free MoneyMagpie Debt Action Plan emails.

You’ll receive handy hints and help straight to your inbox every week, and if you follow the simple plan you can be back in the black in no time!


Got some good ideas of your own on ways to pay off debt? Tell everyone about your debt solutions by commenting below.


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Renting out your spare room is actually a really great idea. You could even turn an unused office into a spare bedroom. Thanks for sharing the tips, I’ll definitely keep them in mind!


Very good point!

Julie Reid
Julie Reid

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Deane Ooley
Deane Ooley

Extremely interesting blog post thank you for sharing I have added your site to my bookmarks and will be back By the way this is off subject but I really like your sites layout.


The Spareground website lets you rent out any spare space you have from driveways, garages, unused storage space, gardens, land as well as spare rooms and accommodation and doesnt cost anything to use the site either


Save even more money by buying things online through a cashback web site.

Sites such as FutCash offer cash back against online purchases.

Joining the web site is free and a £2.50 cashback bonus is given for new signups. If you refer your friends you can also get another £5.00 cashback bonus.

Also, with the addition of voucher codes (listed on the site), you can save even more money on your online purchase.


I also had a bad experience with Alliance and Leicester. I tried to pay money IN to clear an overdraft, and because i didn’t have the account details with me, they refused point blank to look me up on the system and accept the money. They then set a credit collection agency onto me and it cost me over £300…. I will never EVER bank with them again.


A&L i wish i’d never swopped they rip me off BIG TIME £8.00 payment (just over overdraft limit) cost £25.00 total £33.00 then another payment of £15.00 £25.00 for the same day wages went in last after there charges £73.00 off wages no joke in a month they have charged me £250 weekly wage gone in charges. tried for extened overdraft told no REASON THEY WANT OR MONEY FOR THERE BONUS!!!!!!!!!!!!!!!!!!!!!!!

Debby Lea
Debby Lea

Yes totally agree re Alliance & Leicester! Worst move we ever made they are so shocking and have caused so many problems for us that it would take me a whole book to list the nightmare! Lets just say DONT if you are considering moving your account to them – once we sort out the mess we are now in we will move back to our old bank. P.S Do not be fooled by the match your overdraft promise. You send in original statements as proof but they loose them and make a total hash of the admin then tell… Read more »


It is important that we understand the difference between a asset and a liability and how the numbers work.

John Wardle
John Wardle

uShare .co .uk is all about saving money. It lets you borrow and lend everyday items with people who live or work in your local community. You don’t have to pay for each item you borrow as it works on a points system meaning you could save lots of money by removing the need to buy something you may only use once! Simply borrow it, use it and return it. Have a look ushare

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