Join our mailing list to stay informed!
Posted by Revive Financial on Aug 3, 2023 1:44:00 PM

Debt becomes a pressing issue when your income is insufficient to cover regular repayments on personal loans, bills, and credit cards.

When repayments get out of hand, people often turn to payday lenders, credit cards and get into more debt to pay off their debt. This can lead to a vicious debt cycle that’s near impossible to break.

If you're wondering how to pay off debt faster and avoid this debt cycle, there is an effective way. It all comes down to prioritising your debt repayments as they become an issue.

Know Your Debts by Writing Them Down

If you are starting to struggle with your debt repayments, you need to take some time to plan out a strategy to get your budget back on track. The quickest and easiest way to get started is to write all your multiple debts down.

You'll need to know the following:

  • How often the debt is due (including the next payment date for each)
  • How much the minimum repayment is
  • How much you have left owing
  • Who you owe the money to

Once you've gathered this information, you'll have a really good idea of where you're at with your debt. It will also help you figure out which debts to pay off first when you come up with your debt pay-off plan.

Speak to Your Creditors — Request Hardship

Understandably, when people fall behind on their personal debts, they shut down and go into hiding, ignoring all the calls from their creditors. But your creditors can be your lifeline in this difficult time.

By being honest and upfront with your creditors, they may be able to offer a helping hand during financial hardship rather than harass you for payment. Many companies will extend your due date, help to organise a reduced repayment arrangement or even pause the interest for a period of time.

You need to call the hardship department to discuss these options with your creditors. Your bill will often display a specific number you can call if you're having trouble making repayments.

If you're able to arrange hardship, add the new information to your list of debts, including how long the hardship arrangement will last so that you can plan accordingly.


Find a Method in the Madness

Now you have an idea of your debts, you need to construct a plan to pay them off.

Some debts are more important to repay than others and should be prioritised. Make sure you're managing at least the minimum repayments on all your debts so you aren't defaulting on any of the debts. You can create a plan to pay off your debts early with any extra money.

Here are the different types of debts you might have and suggestions on which you should consider paying off first:

Secured debts

Things like your mortgage and secured car repayments should take priority over all your debts. If you fail to repay these debts, your creditors are within their rights to repossess the assets the loan has been secured against.

So by missing your secured payments, you're putting yourself at risk of losing your house or car. Make sure you're always making the minimum payments on these debts.

If you can't afford the repayments on your car and you don't need it for work or if you have another way of getting around, you might consider handing it back to your creditors voluntarily.

Your creditors will then sell the car to recover as much money as possible. You'll still owe them money if there's a shortfall, but this debt will be unsecured.

Debts in hardship

These arrangements might not be in place for long and are designed to help you quickly catch up on your repayments. Try not to default on these and risk having them revoked by prioritising the payments.

Debts with high interest

These debts are costing you the most to maintain.

The amount might only be small, but the massive interest rate accumulating on the highest-interest debt will send your repayments through the roof. Where you can, prioritise these debts by allocating a little extra money to the repayment amount to try to pay it off early.

Generally, debts with the highest interest will be either credit card debt or a payday loan. Make sure you don't continue to use the credit card, upping your credit card bills while you're trying to pay it off.

You might also consider a balance transfer to a card with a 0% interest period to help pay this debt off without accumulating further interest.

The smallest debts

If you have a few debts of $200-$300 that you just can't get rid of, pay them off first. Starting with the smallest debts first is known as the debt snowball method.

Not only will you not have to worry about these anymore, you can then allocate the money you would usually put towards these small debts to your larger debts to help you get the balance down.

Do What's Right for You

At the end of the day, it's entirely up to you how you prioritise your debts and which debt to pay off first. Everyone is in a different debt situation; what works for one person might not work for another.

Each time you pay off a debt, you might like to contribute the extra cash you would usually pay to that debt to another to help you pay that debt off faster.

You might also like to put the money back into your cash flow to help you pay for essentials like petrol and groceries. You might even want to try to save it.

The important thing is always to know your debt situation—what you owe to who—so you can keep track of monthly payments and take affirmative action if you know you're going to fall behind.

For more information on budgeting and how it can help get your finances back on track, check out our budgeting page. You could also consider debt consolidation and a debt consolidation loan as part of your debt repayment strategy.

Topics: Budgeting, Personal Debt, Recent Articles

How Can We Assist You Today?

Personal Debt Icon Personal
Business Debt Icon Business
Please select an assistance option to continue.

Types Of Unsecured Debts

Credit Card Icon Credit/Store Cards
Personal Loan Icon Personal Loan
Pay Day Loan Icon Pay Day Loan
Tax Debt Icon Tax Debt
Disconnected Utilities Icon Utility Bill
Other Debts Icon Other
Please select at least one type of unsecured debt.

Your Business Structure

Sole Trader Icon Sole Trader
Partnership Icon Partnership
Company Icon Pty Ltd Company
Tax Debt Icon Trust
Please select at business structure to continue.

Unsecured Debt Amount


Business Debt Amount


Take Back Control Today!

First Name

Last Name


Phone Number

Phone number must be 10-digits long and begin with a 0. (e.g. 04 1234 5678)

Post Code

Post code must be 4-digits long (e.g. 4567)

Some of your details appear incorrect.
Please update the highlighted fields and re-submit.


You’ve taken the first step to steer your business back to viability

Let’s keep the momentum going, take the second step by linking your Xero account now.


You've taken the first step to becoming debt free

Let's keep the momentum going, take the second step now and complete the assessment form.

By submitting this form you acknowledge that you have read and accept our Privacy Policy