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How to pay off debt

Once you’re organised and have a clearer picture of what you owe, it’s time to look at your options.

Use your savings to start paying your debts. This can save hundreds of pounds a year in interest charges. Try to keep an emergency fund to avoid having to borrow in future.

Get a personal loan instead of using credit cards or overdrafts. They often have lower interest rates, give you certainty about monthly repayments and mean you owe just one person. Make sure you can meet the monthly repayments before taking this option.

Switch credit card debts to a 0% balance transfer credit card so you won’t have to pay interest on the balance for a fixed period. Consider any transfer fee and remember the interest rate will increase after a fixed time.

Make a repayment offer to your creditors. If you’re expecting a lump sum or increased income soon, you can ask your creditors to suspend payments on your account for a set period. This is a ‘moratorium’.

If they refuse or you have low income, offer to make small monthly payments for a set period. This shows you’re making an effort to pay your debts. If your situation doesn’t improve, ask if your creditor will consider writing off the debt altogether. The Citizens Advice website has sample letters for creditors.

If you signed a financial commitment you didn’t understand, get your debts written off. This is rare, but if you didn’t have the mental capacity to understand the contract you signed, you may be able to get it cancelled. This might be because you have a mental illness, dementia or learning disability. Get help from an advice agency or Mind.

Equity release is a way older homeowners can release cash from their home without having to move. Give equity release careful thought and seek professional advice before making a decision.

Further information


Our Information guides are short and easy to digest, giving a comprehensive overview of the relevant topic. Factsheets are longer with more detail, and are aimed at professionals.

You can download other guides in our series from publications

For more information: Call Age UK Advice: 0800 678 1174

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