Getting out of debt is important for reaching your other financial goals, such as saving or investing for the future. But making a dent in credit cards, student loans or other debts can seem daunting, especially if you’re saddled with high interest rates. 

If you’d like to cut your debt in half within the next six months, it’s not impossible to do but you’ll need a plan. Here are the steps that could help you end up with 50% less debt six months from now.

1. Consolidate credit cards with a personal loan

Chipping away at credit card debt can seem like you’re getting nowhere fast when you have a steep APR. Consolidating your card balances with a personal loan at a lower interest rate can save you money and get you out of debt faster. And you’ll have just one monthly payment to make each month. 

Can you really cut debt by 50% this way? 

Yes, if you’re able to secure the best interest rates on a personal loan. For that, you’ll likely need a credit score of 720 or better. One of the best ways to improve your credit score is paying bills on time each month. 

Are personal loans easy to get?

They can be, if you’ve got a good credit history and steady income. Even if you have bad credit, however, it’s still possible to qualify for a personal loan to consolidate debt. 

2. Double down on debt consolidation loan payments

Once you’ve consolidated high interest credit cards into a single personal loan with a low interest rate, review your budget. The goal is to find as much money as possible to apply toward your payments each month, above the minimum payment due. 

Can you really cut debt by 50% this way? 

Yes, but you’ll need to do the math. For example, if you consolidate $10,000 of credit card debt into a personal loan, you’d need to pay off $5,000 in six months or $833 each month. Crunching the numbers can make it easier to find the extra money to put toward debt. 

How can I find extra money to pay towards debt? 

Cash windfalls can help you cut your debt balance by 50% or more in six months or less. For example, you may apply bonuses from work, refunds or rebates to what you owe. You can also sell things around the house and use the cash to reduce your balance. 

3. Use the debt avalanche method

The debt avalanche method advocates ranking debts from the highest APR to the lowest. You’d then apply extra money toward the payment for your most expensive debt, while paying the minimum due on the rest. If you decide not to consolidate debts with a personal loan, you might consider this strategy instead. 

Can you really cut debt by 50% this way? 

Yes and you may be able to do it relatively quickly, depending on what you owe and how much you’re able to pay toward the most expensive debt. For example, if you’re able to put an extra $1,000 a month toward a $12,000 balance, you could get rid of half the debt within the six-month window. 

Can I use the debt snowball method instead?

The debt snowball method works almost the same as the debt avalanche but with one twist: debts are ranked by smallest balance to highest. You could use this method to cut debt by 50% in six months or less but you’ll save more on interest charges with the debt avalanche. 

4. Consider debt settlement carefully

Debt settlement allows you to pay less than what’s owed to cancel out a debt. For example, if you owe $3,000 to a credit card company, your creditor may allow you to pay $1,500 instead and forgive the rest. 

Can you really cut debt by 50% this way? 

Yes, but there’s a catch. You’ll need cash to make pay the agreed-upon amount. 

Can I settle debts if my accounts are current?

Generally, no. Debt collectors and creditors typically only consider debt settlement when you’re significantly past due. If your accounts are all current, getting a debt consolidation loan could prove the better option for paying off debt. 

How to get a debt consolidation loan

Debt consolidation loans can make cutting debt in half easier to do. The first step in getting a loan for debt consolidation is checking your credit report and scores. This can give you an idea of what loan terms and interest rates you’re likely to qualify for. 

You can then visit an online loan marketplace to compare the best personal loans and apply. When comparing debt consolidation loan offers, consider the loan terms, borrowing limits, interest rates and fees to help you find the right one for your needs and budget. 



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