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DebtHow to Pay Off Debt in the UK (2026 Guide)
10 min read · Updated March 2026
UK adults carry an average of £3,700 in unsecured debt (excluding mortgages). Whether it's a credit card balance, personal loan, or overdraft, a clear strategy makes all the difference. This guide covers the two most proven debt payoff methods, a comparison of each, and practical steps you can start today.
In this guide:
1. List Every Debt You Owe
You can't fight what you can't see. Write down every debt: credit cards, personal loans, car finance, overdrafts, buy now pay later (BNPL). For each one note the balance, interest rate (APR), and minimum monthly payment.
| Debt | Balance | APR | Min Payment |
|---|---|---|---|
| Credit card A | £2,400 | 22.9% | £60 |
| Credit card B | £800 | 34.9% | £25 |
| Personal loan | £5,000 | 9.9% | £145 |
| Overdraft | £500 | 39.9% | £15 |
2. Stop Adding to Your Debt
Before you start paying down, plug the leak. Freeze your credit cards (literally — some people put them in a glass of water in the freezer). Switch to a debit card for daily spending. The goal is to stop the balance growing while you work on clearing it.
If you're using a credit card for cash flow because your income doesn't cover expenses, this is a budgeting problem first. Use Womho's budget tracker to find where money is disappearing before choosing a debt strategy.
3. Snowball vs Avalanche — Which Works for You?
There are two dominant debt payoff strategies. Both work — the best one is the one you'll stick to.
❄️ Debt Snowball
Pay off the smallest balance first, regardless of interest rate. Put all extra money at it while paying minimums on everything else.
Best for: People who need quick wins to stay motivated. Clearing small debts fast builds momentum.
🔥 Debt Avalanche
Attack the highest interest rate first. Pay minimums on everything else and throw every spare pound at the most expensive debt.
Best for: People comfortable with delayed gratification. Saves the most money in interest overall.
Example: £8,700 total debt
Using avalanche on the example above — hitting the 39.9% overdraft first, then the 34.9% card — saves roughly £340 in interest versus snowball order. That said, if clearing the £500 overdraft first gives you the psychological boost to stay on track, the snowball wins in practice even if it costs a little more.
4. Consider a 0% Balance Transfer
If you have good credit, a 0% balance transfer card can be a powerful tool. You move existing credit card debt to a new card charging 0% interest for a promotional period (typically 12–30 months). Every payment goes straight to reducing the balance, not the bank's interest.
Watch the small print: there's usually a transfer fee of 1–3% of the balance. Divide the fee by the interest you'd have paid to check it's worth it. Also set a reminder before the 0% period ends — the revert rate is typically 20–30% APR.
⚠️ Warning: Only use a balance transfer if you can commit to not spending on the new card. New purchases on balance transfer cards often attract full APR from day one.
5. Overpay as Much as You Can
Even small overpayments make a dramatic difference. Paying an extra £50/month on a £3,000 credit card at 22.9% APR cuts your payoff time from 14 years (minimum payments only) to under 3 years — and saves over £2,000 in interest.
| Monthly payment | Time to clear | Total interest paid |
|---|---|---|
| Minimum only (£60) | 14 years+ | £2,100+ |
| £100/month | 4 years 2 months | £1,020 |
| £150/month | 2 years 6 months | £590 |
| £200/month | 1 year 9 months | £395 |
Based on £3,000 balance at 22.9% APR
6. When to Get Free Debt Advice
If minimum payments are eating more than 20% of your take-home pay, or you're regularly missing payments, seek professional help. The UK has several excellent free debt advice services:
- StepChange — free debt advice and debt management plans (stepchange.org)
- National Debtline — free phone and online advice (nationaldebtline.org)
- Citizens Advice — face-to-face help in local offices
- MoneyHelper — government-backed guidance (moneyhelper.org.uk)
Debt is not a moral failing. These services are free, confidential, and exist precisely for situations like yours.
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