UK Debt Payoff Calculator
Snowball Method
Pay off smallest debts first
- Quick psychological wins
- Builds momentum fast
- Best for motivation
- May pay more interest
Avalanche Method
Pay off highest interest first
- Saves most money
- Mathematically optimal
- Best for large debts
- Slower initial progress
Add up to 5 debts to see your total payoff time and interest.
💡 When to Consolidate
Consolidation makes sense when your current average APR is above 18% and you can get a consolidation loan below 15% APR.
UK Debt Statistics 2025
| Debt Type | Average Amount | Typical APR | Monthly Interest |
|---|---|---|---|
| Credit Cards | £2,688 | 22.9% | £51/month |
| Store Cards | £1,450 | 29.9% | £36/month |
| Personal Loans | £8,500 | 11.5% | £81/month |
| Overdrafts | £1,200 | 19.5% | £19/month |
| Car Finance (PCP) | £22,000 | 8.9% | £163/month |
⚠️ Average UK Household Debt
Total UK unsecured household debt: £65.6 billion across credit cards, loans, and overdrafts. Average per adult: £1,312 (excluding mortgages). 12.8 million UK adults have problem debt.
7 UK Debt Repayment Strategies
0% Balance Transfer Card
Transfer credit card debt to 0% APR card (18-29 months interest-free). Pay 2-3% transfer fee, clear debt during 0% period. Save £1,500-£4,000 on £10,000 debt.
Avalanche Method
Pay off highest interest rate debts first. Pay minimums on all except highest APR, attack that with extra payments. Saves £500-£2,500 vs snowball method.
Negotiate Lower APR
Call your credit card provider and ask for rate reduction. Success rate 50-70% with good payment history. Typical reduction: 5-10% = £600-£1,500/year saved.
Debt Consolidation Loan
Combine multiple high-APR debts into one lower-rate loan (8-15% APR). Simpler payments, lower interest. Best for £5,000+ total debt.
StepChange Debt Management Plan
Free charity service freezes interest, reduces payments to affordable level. Contact StepChange on 0800 138 1111 for free, impartial advice.
Find £100-£300 Extra Monthly
Cancel unused subscriptions, meal prep, switch providers. Extra £100/month on £10,000 debt = 29 months faster payoff + £1,789 interest saved.
Apply Windfalls to Debt
Tax refunds, bonuses, sold items - apply 100% to debt. £1,000 lump sum = 8-12 months faster payoff + £437 interest saved.
Best UK 0% Balance Transfer Cards 2025
| Card | 0% Period | Transfer Fee | Revert APR |
|---|---|---|---|
| Barclaycard Platinum | 29 months | 2.99% | 24.9% |
| Virgin Money | 28 months | 2.9% | 23.9% |
| MBNA | 26 months | 2.75% | 24.9% |
| Santander Everyday | 22 months | 3.5% | 22.9% |
| NatWest | 21 months | 2.49% | 23.9% |
⚠️ Balance Transfer Warnings
- Never spend on balance transfer cards - destroys 0% benefit
- Set autopay for minimum payment - one miss can cancel 0%
- Calculate exact monthly payment to clear before 0% ends
- Revert APR is brutal (23-25%) - always clear before 0% ends
Free UK Debt Help (Never Pay for Advice)
🆘 StepChange
UK's largest debt charity. Free DMPs, IVAs, bankruptcy advice.
0800 138 1111📞 National Debtline
Free phone & webchat debt advice. Self-help resources.
0808 808 4000🏛️ Citizens Advice
Free debt + benefits advice. 2,500+ local offices UK-wide.
0800 144 8848💷 MoneyHelper (Gov)
Official government money guidance. Budget planners, debt tools.
0800 138 7777⚠️ Avoid Debt Management Companies Charging Fees
Never pay £500-£3,000 for debt help - StepChange does the same thing FREE. Avoid companies advertising "write off 70% of debt" or charging upfront fees. Always use FCA-regulated charities.
7 Costly UK Debt Mistakes
❌ Minimum Payments Only
£5,000 at 19.9% APR with minimums = 14 years + £3,691 interest. At £150/month = 3.5 years + £1,042 interest. Difference: £2,649 wasted + 10.5 extra years!
❌ Payday Loans to Pay Credit Cards
Payday loans: 40-100%+ APR vs credit cards 18-29% APR. Taking payday loan creates debt spiral. Never use payday loans except genuine emergency.
❌ Continuing to Use Cards While Paying Off
Paying £300/month but spending £100/month = net £200. Payoff takes 2-3× longer, interest doubles. Cut up cards during payoff!
❌ Missing 0% Balance Transfer Deadline
Miss the 0% deadline = 25-30% revert APR kicks in. £4,000 left = £1,000-£1,200/year sudden interest. Set reminder 3 months before 0% ends!
❌ Ignoring Debts
Missed payments → defaults → CCJs → bailiffs. Credit file damaged 6 years. Contact creditors immediately if struggling - they prefer to help than chase.
Frequently Asked Questions
For £5,000 debt at 19.9% APR: £200/month = 3 years (£1,200 interest), £150/month = 4.5 years (£2,100 interest), minimum payments only = 9+ years (£3,700 interest). Always pay more than the minimum to become debt-free faster and save thousands in interest.
Snowball method: Pay off smallest debts first for quick psychological wins and motivation. Best for multiple small debts under £5,000.
Avalanche method: Pay off highest interest rate debts first to save maximum money on interest. Mathematically saves £500-£2,000+ more than snowball, but slower initial progress.
Choose snowball if you need motivation, avalanche if you want to save the most money.
Consolidation makes sense if: you have multiple credit cards above 18% APR, you can get a consolidation loan below 15% APR, and you commit to not building up new card debt.
Options: Personal loans (8-15% APR), 0% balance transfer cards (12-29 months interest-free), or StepChange Debt Management Plans (freeze interest completely).
Warning: 77% of people who consolidate then rack up new credit card debt on top of the loan. Cut up cards after consolidation!
Free UK debt advice charities:
- StepChange: 0800 138 1111 - largest UK debt charity, 600,000+ helped annually
- National Debtline: 0808 808 4000 - phone & webchat advice
- Citizens Advice: 0800 144 8848 - 2,500+ local offices
- MoneyHelper: 0800 138 7777 - government service
All are 100% free, FCA-regulated, and can help with DMPs, IVAs, creditor negotiations. Never pay for debt help!
Yes! Success rate is 50-70% if you have good payment history. Call your credit card company and say: "I've been a customer for X years with perfect payment history. I've received 0% balance transfer offers from competitors. Can you reduce my APR?"
Typical reduction: 5-10% APR = £600-£1,500 saved per year on £8,000 debt. If the first agent says no, call back and try a different agent.
Consequences of missed payments:
- 1 late payment: £50 late fee, credit score drops 80-120 points
- 3+ missed: Default registered on credit file (stays 6 years)
- 6+ missed: Debt may be sold to collections, CCJ possible
- CCJ: £100-£300 court costs, credit destroyed, potential bailiffs
Solution: Contact creditors BEFORE you miss a payment. Most will offer payment holidays or reduced payments if you explain your situation.
Individual Voluntary Arrangement (IVA): Legally binding agreement to pay back what you can afford over 5-6 years. Remaining debt is written off.
Suitable if: You owe £10,000+ to multiple creditors, can afford £100+/month, want to avoid bankruptcy, own property you want to protect.
Downsides: Stays on credit file 6 years, may need to release equity from home, public register, affects future borrowing.
Contact StepChange (0800 138 1111) for free IVA assessment - never pay a company to set up an IVA.
Recommended approach:
- Build £500-£1,000 "starter" emergency fund first (prevents using credit cards for emergencies)
- Then attack debt aggressively with all extra income
- Once debt-free, build full 3-6 months emergency fund
Having even a small emergency fund prevents the cycle of paying down debt then using credit cards again when unexpected costs arise.