How to Pay off Debt with Low Income – [ 8 Working Strategy ]


Getting out of debt is very difficult, it is just a type of trap. And when you have a low income, it becomes more difficult.

I’m going to tell you some of the best strategies to get out of debt with low-income that will help you to get rid of debts.

If you want a debt-free life with your low income, this guide will really help you to get out of your debt.

Before going ahead let me quickly tell you what are those strategies that will help you to get out of the debt.

  • Understand Debt Paying off Methods ( Debt Snowball, Debt Avalanche)
  • A Proper Analysis
  • Balance Transfer Credit Cards
  • Don’t Acquire New Debt Just to Pay off Old one
  • Try to focus on one debt at a time
  • Consolidation of Loans
  • Cut out extra expenses and save as much as you can
  • Build Side Income

Let’s get started.

8 Strategies to Get Out of Debt With Low Income

To get out of the debt, you need to apply the strategies that will help you to get out of the debt when you have a low income.

Let’s know what are those startigies:

Understand Debt Paying off Methods ( Debt Snowball, Debt Avalanche)

There are different strategies like Debt Snowball, Debt Avalanche that help you to get out of the debt.

Let me quickly tell you what are debt snowball and avalanche methods and how do they work.

Debt Snowball is derived from the method of building snowman in yard.

If you remember when you used to make snowmen in your yard, you used to take some small snowballs earlier, and with that, you used to make snowmen.

Just like this when you start paying off your debt, first find the small part of your debt and start paying off that small amount of that debt.

And on the other side, keep finding some of the opportunities to make money. Keep repeating it until you completely get out of your all debt.

Debt avalanche is somewhat opposite to the Debt snowball method. In the Debt Avalanche Method, a debtor first starts paying off their high-interest debt and repeat it a debtor get out of the debt.

A Proper Analysis

The first step for getting out of debt is to know why you are in debt and how much debt you are in.

The proper analysis of your debt is very important. Figure out the reasons of debt, amount of debt, interest rate, number of loans, time period of debt.

Write down all these things in Google Spreadsheet or in a blank paper if you are a traditional one.

Now make a plan that will include the strategies that are mentioned below for getting out of your debt.

Balance Transfer Credit Cards

Moving out your all the credit card debt into the new one credit card that has different types of offers and rewards for you.

The method of Balance Transfer Credit Cards is somewhat similar to balance transfer credit cards. But, in this method, you just keep moving your money into different credit cards so that you can get out of the debt.

But, the method of balance transfer credit cards can hurt your credit score. It is a beneficial method when you find a credit card that doesn’t apply interest rate on transferred money.

Don’t Acquire High-Interest Rate New Debt Just to Pay off Old one

If you are doing this mistake, believe me you will never get out of the debt.

Acquiring high-interest new debts just for paying off the previous old debt will make you stuck in the debt trap.

Many people think that consolidation of loans means acquiring a new debt just to pay off the old one debt. But, this is a misconception.

When you consolidate your all debt into the new one loan, you take one step for getting out of debt because a new consolidated loan has a low-interest rate as compare to that of the previous one.

But, never acquire a high interest rate debt to buy or pay off your old debts.

Try to focus on one debt at a time

It is one of the biggest mistakes that I have seen people doing very often while trying to get out of debt.

But unfortunately, they remain stuck in the debt due to this mistake.

You can never pay off your all debt at one time if you have a low income because it’s not possible. Be practical.

You took the loan because your income was less. How can you pay off all that debt just in one night?

It’s not possible.

Instead of it, try to keep the focus on the debt at a time. Figure out the small part of your debt that you can pay off easily with your current income.

When you will completely pay off that small part of your debt, you are free from paying off interest for that amount of debt and this will help you a lot in paying off the remaining debt.

I know when you focus on one debt, you will start getting the penalties of late payments of other debt.

But, when you will completely pay off a small amount ( even 1% ) of your debt, you have taken one step of getting out of the debt.

Consolidation of Loans

You might have taken different types of loans like student loans, personal loans, car loans that have a very high-interest rate.

In such case, consolidating your all loans into the bigger loan will help you a lot to get rid of all debts.

Consolidation of loans is something that is very basic for getting out of the debt but most people ignore or forget about it.

Consolidation of loan is quite easy, you have to just find a new single loan that can pay of all your rest of the debt with a low-interest rate. All your debt will be consolidated into the new and bigger ones.

You can easily get a loan that has low interest if you have a good credit score but if you have a bad one you have to do a little bit struggle to find a loan of low interest rate.

Now, you have to pay off only one debt with a lower interest rate and it can save your money a lot.

The mindset of most people who try to get rid of the debt is to pay off your just with any magic that doesn’t exist.

The journey of paying off the debt starts by saving and making a little amount of money.

And you can use that money which is saved from the consolidation of loans in stocks, bonds, or pay off your remaining debt.

Like you can invest that money in stocks and bonds or you can just pay off the small part of your debt with the help of money that you have saved with the consolidation of loans.

Build Side Income

Since you are facing the problem of low income, you must build side incomes that can help you to get out of the debt much faster.

And believe me, the biggest factor of getting into the debt is low income, as your income is low, you had to take the debt to survive a life.

But, you must make sure that your side work must not disturb your main work.

What I mean to say is you should give first priority to your main work that you are doing right now. Don’t leave your current job or work just to try out these side hustles.

Once these side hustles start making a good amount of money you can start giving more time and effort to these side hustles too.

I have already published some of the best articles to make side income online from your home. 

Helpful Resources to Build Side Income:

22 Best Passive Income Sources – How to Make Passive Income Online

17 Genuine Online Jobs That Can Make Money From Home

30 Side Hustles to Make Money as a Teenager in 2020

Cut out extra expenses and save as much as you

You can use different money management that automatically tracks your expenses that are purchased with the help of your credit cards.

Use the best cashback apps that will help you to save your money while shopping online on any store.

The Round-Up feature of Acorns money management app also will help you a lot to automatically save your money whenever you will make a purchase with acorns linked car.

Open Google Spreadsheet or use blank a paper to write down your all monthly expenses.

After writing down all your monthly expenses, try to figure out the expenses that are extra or of no use. It is the best way to figure out your all extra expenses that are done with and without your credit cards.


And here you have 7 strategies that is very helpful to get out of the debt when you have a low income.

Now I would like to know your opinion:

Which strategy you are going to try first?

Are you going to consolidating your all loans?

Or maybe you will try to understand all the methods like Debt Snowball, Debt Avalanche of getting out of the debt.

Either way, let me know your opinion in the comments section below.


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