Debt Help in India: 10 Practical Ways to Get Out of Debt Fast & Regain Financial Freedom
Debt, credit cards, personal loans, and various EMIs running simultaneously, this is a harsh reality for many Indians.
It might sound like a situation that is easily controllable, but over time, interest rates build up, and penalties add to them, and before you know it, you are in a very bad situation.
But, the question still remains – how to get out of debt fast? Well, the answer to this is not very simple, but rather which one to use in a given situation.
Now, let’s get to know that.
The Problem: Why Debt Becomes Difficult to Manage
It is not like people get into debt overnight, but over time, they get into debt due to
Various loans and EMIs
Increasing interest rates, especially in credit cards
Paying off the minimum, which is still less and does not reduce the principal amount
Various unforeseen expenses, such as a medical condition, unemployment, etc.
And then, over time, this leads to
Irregular payments
Increasing stress
Recovery notices
And then, the question still remains, to pay off debt but get out of debt fast!
6 Practical Ways To Get Out of Debt
There is no one size fits all solution. The best solution will depend upon:
Your income
Your Credit score
Your total Debt
Your repayment ability
The most common ways to get out of debt in India are:
1) Budgeting & Controlling Your Expenses
This is the base.
By keeping record of where your money goes, you can:
Identify unnecessary expenses
Pay off debt with the money you save
Avoid adding to your debt
Making a few cutbacks, such as cutting down on unnecessary expenses, is a good start.
2) Earning More (If You Can)
If you don't earn enough to pay off your EMIs, you should:
Look for a second job
Consider freelancing or part-time jobs
Ask for a promotion or a better job
You should use this to pay off your debt.
3) Target High Interest Debt
You might think, "I am in debt, and all debt is equal." But no, all debt is not equal.
You should focus on paying off debt with high interest, such as:
- Credit cards
- Personal loans
There are 2 ways to prioritize debt repayment:
Pay off the smallest debt first (snowball method)
Pay off the debt with the highest interest rate (avalanche method)
4. Loan Consolidation (If You Qualify)
If you have a good credit score, you might want to think about consolidating your loans.
This means:
Consolidation of all loans into one loan
Pay one EMI
Possibly lower rate of interest
This is a good option if:
You have a regular income
You have a good credit score
5. Loan Settlement (If You are Under Financial Stress)
In case you are facing a problem in paying your loan and your account is already in default, loan settlement is a good option.
In this, you negotiate with your bank and pay a reduced amount, and your loan account is closed.
This is a good option if:
You are unable to pay your loan in full
You have already stopped paying EMIs
Recovery actions have already been initiated
It might affect your credit score, but it:
Will help you close your loan
Will prevent any further escalation
Will help you to start fresh
FREED helps you settle your loan in a legal and orderly manner.
6. Structured Remediation
In this case, your bank might offer you various options such as EMI restructuring, lower EMI, or longer tenure, etc.
In this, you restructure your loan without defaulting on your loan payments.
How to get out of debt: Step-by-step
Step 1: Create a debt list
Total debt
Interest rate
EMIs
Step 2: Know your payoff capacity
Understand your capability to pay.
Step 3: Pick a debt management option
Good income: Repay/consolidate debt
Moderate stress: Restructure debt
Severe stress: Settlement
Step 4: Talk to your lenders
Don’t ignore the call; talk and settle.
Step 5: Be consistent
It’s a long process; be disciplined.
Common mistakes to avoid
Don’t ignore your debt
Don’t make the minimum credit card payments only
Don’t take a new loan to pay off existing loans
Don’t forget to put the agreement in writing
Don’t promise more than you can pay
Expert advice to get out of debt quickly
Pay your debts with the highest interest rate first
Document your communication with the lenders (email is the best)
Don’t let your emotions decide for you
Don’t rush into decisions
Sometimes it’s best to seek expert help
How FREED Can Help
Getting out of debt is not just about paying , it’s about taking the right route.
FREED assists borrowers by:
Identifying all options (settlement, consolidation, etc.)
Assessing what’s actually possible
Come up with a structured plan
Negotiating and communicating with lenders
Speak FREED experts to identify the best option for you
Use FREED to check your credit score and start to build it
Conclusion
There is no quick way to becoming debt-free but there are smarter ways of doing it.
No matter it’s budgeting, consolidation, or settlement, the critical piece is:
To take the right route for your situation
To start early
To be consistent
It can feel like debt is an intractable problem but with the right information and support you can regain control of your finances.
FAQs
1. What is the fastest way to get out of debt in India?
There is no single fastest way. It depends on your situation — consolidation, repayment, or settlement may work differently for different people.
2. Is loan settlement a good option?
It can be helpful if you are unable to repay the full amount and are already in financial distress.
3. Can I clear debt without a loan?
Yes, through budgeting, increasing income, and structured repayment strategies.
4. Does debt consolidation reduce total debt?
No, it reorganises your debt into one loan. It may reduce interest burden but not principal.
5. How can I improve my credit score after debt?
By making timely payments, reducing outstanding balances, and using credit responsibly.