Make Your Get Out of Debt Plan in 7 Simple Steps

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

get out of debt plan

We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Although you are obligated to repay your debts, you don’t have to let them drag you — or your financial future — down.

However, before you can even take your first steps toward financial freedom, you’ll need a roadmap to get there. A “get out of debt plan,” if you will.

The good news is getting rid of debt is actually a pretty straightforward game of math and compound interest. And once you set a course of action, you’ll be empowered to move forward and get out of debt faster.

If you’re ready to make the change and become debt-free, here’s how to get started.

1. Mentally prepare for your get out of debt plan

Before you even create a get out of debt plan, you have to first adjust your mindset. And that involves taking the emotion out of your finances.

Debt can be a major source of stress, shame, and feelings of failure. So when you’re facing debt, it can feel like an insurmountable obstacle. You might think you’ll never get free of debt. Or, it’s too far in the future to even worry about.

It’s ok and even normal to feel those things. But don’t let emotions hold you back from taking necessary steps to tackle your debts.

No matter how dire your finances feel, there is a way out. And, you’re capable of creating and following that path to financial freedom.

Remember, you are in control of your debts — not the other way around. So before you commence your get out of debt plan, fuel up with the determination to change.

Essentially, if you’re changing your money behaviors then you’re also changing how you view yourself and your finances. All of which is crucial for becoming debt-free.

2. Research what your debts look like

With your new get-out-of-debt mindset now in place, you’ll be able to stomach a full assessment of your debts.

If you’re fuzzy on some key details about your debts, you’re not the only one. Many borrowers have no idea who is servicing their loans, what their interest rates are, or even when their pay-off dates will be.

This can be especially true of student loan debt. For example, you may have several student loans taken out at different times and serviced by different lenders.

Getting your free annual credit report is a great place to start. This will list out all of the debts you currently carry. Including the balance, servicer, and account status (such as current, past due, or delinquent).

With this list of debts, you can start collecting the following key information for each of your debt or credit accounts:

  • Your balance, or how much you owe
  • Current status of your account
  • Interest rate for a specific debt
  • Monthly minimum payment amount
  • Payoff date
  • Contact and login credentials for your account

The good news is you can easily log into your online accounts with most creditors.

Or, call them to get any additional information not listed on your credit report. Then, record these details in a list, spreadsheet, or format that works best for you.

If it’s intimidating to do this all at once, start small by checking out just a couple of accounts a day until you’re done.

3. Check the minimum you owe each month

Now that you have your debts listed out, you can figure out what you are obligated to pay each month.

Essentially it’s the amount you must pay to your creditors to keep your accounts in good standing. And avoid ugly consequences like late fees or default.

The total amount is what you get when you add up the minimum payments for each debt. Hopefully, this is an amount that you can afford each month.

If you’re having trouble keeping up with minimum payments, however, that’s an issue you must address ASAP. And if you’re already to the point of default on some of your debts and can’t afford to catch up, it might be time to contact a bankruptcy lawyer and consider your options.

For student debts, however, keep in mind that these can’t be discharged in bankruptcy. But you can start the process to get student loans out of default.

4. Map out out your monthly expenses

By paying the minimum amounts each month, you’ll stay current on debts. But, you won’t get ahead.

If you want to pay off your debts faster and be debt-free before all of your pay-off dates, that will require paying more than just the minimums.

But to know if you can afford to pay extra on your debts, you’ll need to know what your monthly expenses are. A budget or spending plan will help you account for your money. And keep you accountable for spending it on things that really matter.

Review account statements from your bank and other service providers to see what you are paying for living expenses each month. Add up what you pay for rent or mortgage, bills, and debt payments. Make sure it includes other necessities like childcare, tuition, and groceries.

5. Find how much extra you can afford to pay

Once you have this amount, see how much of a buffer you have left each month (your net income minus your monthly expenses).

This is your disposable income, the cash that’s left over each paycheck or month after you cover all of your necessary expenses.

It’s tempting to just assume you can put all of your disposable income towards extra debt payments. But you want to make sure you’re balancing debt prepayments with other financial goals and expenses as well.

For instance, you might want to save some of your disposable income into an emergency fund. Or, create a “fun money” fund so you don’t end up feeling deprived each month.

On the other hand, the more money you can put towards your debts, the sooner you can be free of them.

When you weigh all of these considerations, you’ll get a better sense of the actual dollar amount of extra debt payments you can potentially make each month.

6. Prioritize your debts

Now that you know how much extra you can afford to pay each month, you can decide the best way to apply extra payments towards your debts.

Remember, you’ll always save the most money on interest by putting extra payments towards high-interest debts first.

Unsecured debts like credit cards, personal loans, and lines of credit will typically have higher interest rates, while secured debt like home loans or car loans tend to have lower rates.

Although student loans are unsecured, they usually (but not always) will have lower interest rates.

Put your debts in order from the highest interest rate to the lowest. Then commit to putting all of the money you’ve earmarked for extra debt payments to lowering the debt at the top of the list with the highest rate.

Rinse and repeat.

7. Get your new payoff date

When you pay extra toward debts, you’ll ultimately pay off one account and free up that total amount you were spending on the monthly payment.

For instance, if you have a $200 payment and are paying $300 extra, once that debt is gone you can add $500 in extra payments to your next debt.

Applying these extra funds toward repaying debts is commonly called a debt snowball or debt avalanche because you keep rolling the freed-up funds into the next debt until they’re all paid off.

You can use the calculator below to get an idea of how much faster you can get rid of your debt if you are paying extra each month.

Or, if you have a goal to be debt-free in a certain number of years, you can also see how much extra you’d have to pay each month to achieve that.

Student Loan Prepayment Calculator

Total current balance

Average interest rate

Current monthly payment

Please choose one:

How much extra do you want to pay on your monthly payment?

Student loan refinancing rates as low as % APR. Check your rate in 2 minutes.

Another tool,, can help you see similar information for all of your debts at once for an overview of all of your debts at once.

Using these tools, you can figure out your new pay-off date and when you’ll be completely debt-free. Then, mark it on your calendar and refer to it as you continue on your journey towards financial freedom.

Keep trying new debt pay-off strategies

With these seven steps, you have a get out of debt plan — a roadmap you can follow to get free of debt and save hundreds (and likely thousands) of dollars in interest.

But don’t stop here! Your getting out of debt plan is just the beginning. In addition to paying extra each month, there are other strategies you can employ to get rid of debt faster.

For instance, you might look into getting a side hustle going which can help you generate more money towards paying off debts.

Or, perhaps you’re interested in refinancing or consolidating debts to a lower interest rate so more of your money goes toward paying down your principal.

Consider improving your spending habits and living more frugally. Both can free up more cash flow for debt repayments.

Also, surround yourself with family, friends, and social circles who have successfully managed their debts. And don’t be afraid to ask them about how they did it or cheer each other on.

All of these actions can help empower you to make some big financial changes. At the end of the day, keep learning about finances, debt, and managing money. Find your grit, and use it to buckle down to make positive financial changes.

Remember, you’re in charge of your finances, for better or worse. You have the power to create financial security and get out of your debt cycle permanently.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.

Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.

Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:Fixed rates from 3.899% APR to 7.804% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.64% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.

5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of October 1, 2018, the one-month LIBOR rate is 2.22%. Variable interest rates range from 2.72%-8.32% (2.72%-8.32% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit We also have several resources available to help the borrower make a decision at, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.47% – 6.99%3Undergrad
& Graduate
Visit SoFi
2.47% – 6.23%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.95% – 6.37%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.72% – 8.32%6Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.