Step 1: List what you owe
Write down each debt with its balance, interest rate and minimum repayments. For example:
| Debt | Balance | Interest rate | Minimum a month |
|---|---|---|---|
| Credit card | $6,000 | 22% | $180 |
| Car loan | $9,000 | 8% | $280 |
| Personal loan | $2,000 | 10% | $90 |
That’s $550 a month of minimums. Say you can pay $200 more, $750 a month in all.
Leave your HECS-HELP debt off the list. It has no interest, only indexation, and repayments come out through your tax, so it’s the last debt to pay off early.
Step 2: Pick a method
Both methods pay the minimum on everything and put the extra on one debt. When it’s paid off, its payment rolls onto the next.
- Avalanche: the highest interest rate first (here, the credit card). It costs the least.
- Snowball: the smallest balance first (here, the personal loan). You clear a debt sooner, which keeps many people going.
Worked out month by month, as in our debt payoff calculator.
The difference between the two methods is small here. What matters most is paying more than the minimums, and keeping at it. Try your own debts in the debt payoff calculator.
Step 3: Pay less interest
- A balance transfer card moves card debt to a card with a low or 0% rate, often for 12 to 24 months, sometimes with a fee of 1% to 3%. The rate then jumps, often to 20% or more, so pay it off before then and don’t spend on the new card.
- A consolidation loan at a lower rate can replace several repayments with one. New personal loans averaged 8.99% in July 2026, against the 20% or so many cards charge. It only helps if you don’t run the cards up again.
- Ask for hardship help: under credit law, lenders must consider a hardship request to change your repayments.
Your credit card statement must show how long paying only the minimum would take. On $5,000 at 20.99%, it’s over 22 years: see the credit card repayment calculator.
Step 4: Find more to pay
- Make a budget and give the extra a fixed amount each pay. The budget calculator shows where your money goes.
- Put windfalls on the debt: tax refunds, bonuses and gifts.
- Stop adding to it: take the card out of your phone’s wallet, pause buy now pay later, and pay by debit card while you clear it.
Step 5: Stay out of debt
Once a debt is gone, keep paying the same amount into savings. An emergency fund means the next surprise bill doesn’t go back on a card. If you can’t keep up with your payments, get free help early from the National Debt Helpline on 1800 007 007: see help with debt.