How to Lower Debt Payments

If you are having trouble keeping up with your debt payments, there are steps you can take. By finding ways to lower your interest rate, consolidating your debts, and reducing your balance overall you can lower the amount you pay each month. You might also opt to work with a credit counselor. Ultimately, the best way to lower your payments is to slowly-but-surely get out of debt. Hopefully, by obtaining lower monthly payments, this can happen more easily.


Lowering Your Interest Rates

  1. Call your credit card companies and ask if they can lower your interest rates. In some cases, obtaining a lower interest rate is as easy as calling your credit card company and asking for one. Be sure to make your monthly payments steadily and consistently for 6 months to 1 year before requesting a lower interest rate.[1]
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    • You might say, “Since I have been consistent with my payments for 8 months now, I was wondering if you’d be able to offer a better rate.”
    • Apply for a different card at a lower rate. If you are approved, see if your credit card company can match that rate.
    • Keep asking! You credit card company might not agree the first time you ask.
  2. Transfer your credit card balance to a lower interest card. Seek out a new credit card that can accept a transfer from an existing credit card (sometimes called a balance transfer credit card).[2] For best results:
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    • Look for 0% or low APR rates. This will usually be an introductory rate, but it will allow you to pay off some of your debt without interest.
    • Look for the longest introductory rate period you can find.
    • Make sure you know what the rate is after the introductory period ends.
  3. Consider student loan consolidation if you have multiple student loan payments. Call each of your student loan providers to figure out the exact amount you owe, the interest rate you are charged, and your minimum monthly payment. Once you’ve compiled this info, contact a consolidation loan provider to find out if you qualify for a better loan.[3]
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    • If you have federal student loans, contact the Department of Education.
    • If you have private loans, you might contact Chase, NextStudent, Student Loan Network, or Wells Fargo.

Lowering Your Balance Overall

  1. Reduce your credit spending. You will not be able to reduce your payments if you continue to accumulate more debt. Figure out a budget you can stick to, and avoid using credit credit cards, taking out loans, or taking on any other form of debt.[4]
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    • Take some time to track your spending habits, so you can see where your money is going.
    • Try hard to to stick to your budget and avoid living beyond your means.
    • Limit how often you eat at restaurants. Prepare meals ahead of time and bring your own lunch.
    • Limit superfluous expenditures. Consider cancelling streaming services or moving to a lower data plan on your phone.
    • Avoid making any large purchases until you can successfully reduce your debt.
  2. Work out a long-term repayment plan. Contact each of your credit card companies and/or loan providers and ask if you can work out a new repayment plan. Doing this may help you avoid late fees and default, while lowering your monthly payment.[5]
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    • You might say, “I am no longer able to make these payments successfully. I would like to create a new repayment plan, so that I don’t fall behind.”
    • Many creditors offer special plans for individuals experiencing economic hardship.
    • Sometimes these plans will require you to close your account.
  3. Make larger payments now. Although it may seem counterintuitive, paying more now will allow you to have lower payments later. If it all possible, try paying more than the minimum amount due.[6]
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  4. Use the “waterfall method” of debt repayment. The best way to lower your monthly payments is to reduce what you owe overall. One method for getting out of debt involves prioritizing your highest interest debt. To do this, figure out which of your debts holds the highest interest rate. Pay only the minimum monthly amount on all of your other debts, and put as much money as you can toward your highest interest debt, until it is paid off.[7]
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    • Once your highest-interest debt is paid off, move on to the debt with the next highest interest rate.

Finding and Working with a Debt Counselor

  1. Look for a credit counselor. You might find credit counselors by contacting your credit union, local housing authority, military base, or university.[8] You can also ask for suggestions from family or friends.
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    • Ask for a description of services before signing up with a counselor.
  2. Discuss debt consolidation. Talk to your counselor about ways you can consolidate your debt. This process involves totaling up the sum of your debts and taking out a loan to pay all of them off at once. By doing this, you will only have 1 monthly payment.[9]
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    • You might try to get a personal loan from a credit union or bank.
    • You might roll your debts onto a credit card using a balance transfer.
    • You might try to get a secured loan, such as a Home Equity Line of Credit (HELOC).
  3. Ask about debt management plans. Through your credit counselor, you may be able to enroll in a debt management plan. A debt management plan means that you pay your credit counselor 1 monthly fee, and they distribute that money to the various creditors you owe. In a debt management plan, your counselor will negotiate with your creditors to get the best interest rate possible.[10]
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    • It can take multiple years to complete a debt management plan. During this time, you must make regular monthly payments.
    • If you miss payments, your creditors can choose to discontinue the plan.


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