debt repayment plan
Getting out of debt

How to Make a Debt Repayment Plan to Get Out of Debt

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Getting out of debt can seem like an overwhelming task, but creating a debt repayment plan can make it much more manageable. A debt repayment plan helps you organize your finances, prioritize paying off debts, and track your progress. This article outlines how to make an effective debt repayment plan to become debt-free.

Assess Your Debt Situation

The first step is taking stock of your current debt repayment obligations. Make a list of all your debts, including:

  • Credit cards
  • Personal loans
  • Payday loans
  • Medical bills
  • Auto loans
  • Student loans
  • Mortgage
  • Any other outstanding debts

For each debt, include details like:

  • Original amount owed
  • Current balance
  • Interest rate
  • Minimum monthly payment

This gives you a complete picture of what you currently owe so you can create your debt repayment strategy.

List Your Income and Expenses

Next, tally up your monthly income from all sources after taxes. Then make a list of your monthly expenses like:

  • Housing
  • Transportation
  • Food
  • Utilities
  • Insurance
  • Childcare
  • Loan payments
  • Entertainment
  • Miscellaneous expenses

Subtract your expenses from your income to find how much money you have left over each month to put towards debt repayment.

Rank Your Debts by Priority

With your debts listed out, you can rank them in order of priority to pay off first. A common strategy is the “debt avalanche” method, where you prioritize paying debts with the highest interest rates first. This saves you the most money in the long run.

Another strategy is the “debt snowball” method, where you pay off debts with the lowest balance first regardless of interest rate. This gives you quick wins to stay motivated.

Create a table like this to organize your debts from highest to lowest priority:

Debt Balance Interest Rate Minimum Payment
Credit Card 1 $5,000 19% $150
Credit Card 2 $2,300 25% $58
Student Loan 1 $15,000 5% $200

Adjust the order as needed based on your chosen payoff strategy.

Calculate a Realistic Repayment Amount

With your income, expenses, and ranked debts, you can now calculate how much money you can feasibly allocate each month towards debt repayment.

Aim to put any disposable income left after expenses towards paying off debt. If that amount won’t cut it, look for areas to reduce spending or increase income.

Be realistic – allocating too much may cause you to burn out and fail. Start small if needed, then ramp up payments as debts are paid off.

Outline Your Debt Repayment Plan

Now you have all the pieces to make your customized debt repayment plan:

  • List of current debts and details
  • Monthly income and expenses
  • Debts ranked by priority
  • Realistic monthly payment amount

Draft up a document outlining:

  • Your overall repayment goal (be debt-free in 2 years, etc)
  • Amount you can pay towards debt each month
  • Order you will pay off debts
  • Expected payoff date for each debt

This concrete plan keeps you focused and accountable long-term. Share it with a trusted friend or partner to bolster commitment.

Pay Off Debts and Track Progress

With your plan in place, it’s time to start repaying and monitoring your progress:

  • Make monthly debt payments on schedule and in full
  • Avoid taking on any new debt
  • Track payments and updating balances owed
  • Re-assess and adjust plan as needed
  • Celebrate each debt payoff milestone!

Visualize your progress by coloring in a debt repayment chart or graph. Watching your debts shrink can keep you motivated.

Seek Additional Support If Needed

If your income simply isn’t enough to make headway, don’t be afraid to seek help:

  • Contact creditors for reduced interest rates
  • Consolidate debts into a lower rate loan
  • Seek credit counseling for customized guidance
  • Consider debt management programs or bankruptcy in extreme cases

The key is committing to the debt repayment plan you create. Stay disciplined and you can become debt-free!


Creating a debt repayment plan allows you to strategically pay off debt in a reasonable timeframe. Follow these steps:

  • List out all debts and details
  • Tally income and expenses
  • Rank debts by priority
  • Calculate a realistic monthly payment
  • Make a detailed repayment plan
  • Pay off debts and track progress
  • Seek additional support if needed

Sticking to a well-made debt repayment plan gets you closer to financial freedom. Know your debt situation, make a game plan, and work that plan. You’ve got this!



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