5 Ways to Reduce Your Debt Payments

Learn what to do if you can't afford your debt payments

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Written By: James Lambridis, Founder/CEO DebtMD

If you have large amounts of debt that has been piling up, and it has become increasingly difficult to meet your monthly payment obligations, know that you are not alone. In the United States, there are nearly 200 million people who collectively hold over $3.5 trillion in credit card, medical, and student loan debt. To comprehend how big one trillion is, at a salary of $36 million per year, NBA superstar LeBron James would need to work 27,778 years to make $1 trillion. If you went back 1 trillion seconds in time, you would be in the year 29,700 BC. Spending $1 million an hour, nonstop for 24 hours a day, you would not run out of $1 trillion for 411 years. If you are looking for ways to reduce your monthly debt payments, DebtMD has narrowed it down to five simple actions you can take to accomplish this. 


This is the first thing you should do when attempting to lower your monthly payments. In today’s uncertain economic climate, many creditors are willing to work with you if you are experiencing a financial hardship due to the COVID-19 pandemic. With the average credit card interest rate around 19%, you can simply ask your credit card company if they would be willing to lower it. Or, if you aren’t able to make a payment in a given month, you can ask to make a partial payment. The key is to be honest and sincere with your creditor. If you have a good history with them and have been a customer for a while, they have good reason to come to a compromise with you.


A 0% interest balance transfer is a great way to lower your monthly payments, however there are some caveats you should know. The 0% APR is usually only good for 12-18 months. If you are not sure you will be able to pay off the entire balance within that time frame, you should refrain from doing a balance transfer. If you do end up transferring it, and fail to pay off the balance before the promotional interest rate expires, you are back in the same situation you were in before. With that being said, balance transfers are good for smaller debt amounts and for people who are expecting to come into money and know they will be able to pay off the full balance within the promotional period.


A debt consolidation loan is another way to lower your monthly payment. This entails taking out a new loan, paying off your existing debts, and consolidating multiple payments into one payment with a fixed interest rate and term. If you are a person who wants a concrete finish line where you know you will be debt-free, a debt consolidation loan makes sense. In addition, most loans offer no prepayment penalty, which is another benefit. However, there are usually origination fees, so be aware of these before you take out the loan. DebtMD has partnered with some of the top debt consolidation loan companies in the industry. Learn more.


Debt settlement is best for people who are seriously struggling with making their minimum monthly payments and/or are experiencing a financial hardship. With debt settlement, a company will attempt to negotiate the principal balance on your accounts and offer a lump sum settlement to your creditors. This requires you to go delinquent on your accounts, which will impact your credit score. These companies are usually able to cut your monthly payments in half and have you out of debt in just 2-4 years. When choosing a debt settlement company, be sure they do not charge any up-front fees, and always check that they are in good standing with the Better Business Bureau. In addition, do your due diligence by reading any reviews and customer testimonials that are available online. Check out our list of approved debt settlement partners.


Credit counseling is almost a hybrid between a debt consolidation loan and debt relief. While you are not borrowing money to pay off your debt, you are hiring an agency to negotiate the interest rates on the credit cards you wish to pay off. The goal of credit counseling is to reduce your interest rates, lower your monthly payment, and allow you to become debt-free in 3-5 years. Keep in mind that whichever accounts you consolidate with the credit counseling agency need to be closed, and it is notated on your credit report that you are working with a credit counselor, though it has minimal effects to your actual credit score. DebtMD has partnered with Debtwave Credit Counseling, one of the most reputable agencies in the U.S. Learn more about credit counseling.



  1. Always try to contact your creditors to lower your interest rate and/or monthly payments before doing anything else.
  2. 0% balance transfers can work only if you know you can pay the debt off before the promotional rate expires in 12-18 months.
  3. Debt consolidation loans, debt relief, and credit counseling are all great ways to lower your payment. Choosing one depends on your goals and unique financial situation.

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