How to Pay Off Debt Faster With the Same Income in 2025 – Best Repayment Tips

Have you ever waited eagerly for your salary, only to see half disappear into credit card bills, personal loans, and EMIs? You can’t even think about rent, groceries, or treating yourself to a buffet meal. 

The stress lasts all day, especially when there's no salary hike in sight. Soon, you start avoiding friends and stop enjoying life altogether. ‘Esa Kab Tak Chalega?’

Debt isn’t just a financial burden; it eats away your income. You might think you're earning ₹50,000, but what reaches your account feels painfully low. No matter how much you earn, money keeps slipping away due to high interest rates (18–42%). Inflation leads to high living costs, and according to CRISIL, expenses will increase by 7% this year. 

But here’s the good news: You don’t need a salary hike to fix this. Start using your money efficiently with smart and disciplined strategies. Follow these steps, and you will not only clear debt faster but also save on interest!

Step 1: Know Where You Stand

Before making any financial decisions, know precisely what you owe. Decisions based on assumptions can lead to trouble. For example, if you assume your expenses are ₹20,000 but in reality they are ₹30,000, managing your finances could be a real struggle.

To stay in control, list all your debts, including credit cards, personal loans, EMIs, and borrowed money. You must know and note the total amount, interest rate (18%–42% for credit cards in 2025), and the minimum payments required.

If you earn ₹50,000 per month and your EMIs exceed ₹20,000 (40% of your salary), immediately cut costs. Did you know that high-interest loans grow fast? ₹1,00,000 at 36% interest can double in two years if unpaid. That is insane, right? The sooner you reduce debt, the better your financial future.

For example, Riya, a 32-year-old teacher, earns ₹45,000/month but owes ₹5 lakh across three loans. Her credit card debt leads to ₹4,500/month in interest alone. With ongoing personal and educational loans, she pays ₹18,000 in EMIs (40% of her income).

It is no surprise that she struggles to save. Using the table below, let’s learn more about her finances and see what would happen if she were left unpaid.

Step 2: Personalize your plan

One-size-fits-all budgeting does not apply in 2025 anymore. You need a plan that works best for you. Adjust the classic 50/30/20 rule according to your budget and needs. Allocate 50% of your income to needs like rent, groceries, and utilities (₹25,000 for a ₹50,000 salary).

Keep 30% for wants, including streaming, dining out, and shopping (₹15,000). The remaining 20% should go toward debt payments and savings. Assign every rupee with a purpose and see the magic happen.

For example, Amit is a 29-year-old content strategist. He earns ₹60,000/month and adjusts the 50/30/20 rule for inflation. He needs ₹32,000 to cover rent, groceries, and utilities, which is 3% more than the rule says (50%).

To balance the extra 3%, he reduces his wants to ₹12,000 (20% instead of 30%). He has limited dining and shopping. Following this strategy, he could invest ₹16,000 (7% more than what the rule says) to clear off debts and save the remainder.  Study the given table to have a better picture.

Step 3: Pick Your Repayment Strategy

The third step is paying off loans strategically to reduce interest and become debt-free faster. With 2025’s unpredictable economic conditions, choosing the proper repayment method is more important than ever. 

Two widely used approaches are the Debt Snowball and Debt Avalanche methods. Let’s examine each one in more detail and consider which might be the best fit for you.

A. Avalanche Method

Imagine you’ve ordered several items, but one fancy dish costs more than the rest. If you pay off the priciest item first, the rest of the bill becomes much easier to manage.

Similarly, the debt assessment method prioritises high-interest debts first. High credit card interest rates (18% to 42%) could save you much money in the long run. 

Let’s understand it better with an example.

For example, Nikhar is a 35-year-old software engineer earning ₹80,000/month. He had ₹2 lakh in credit card debt at 42% interest, a ₹3 lakh car loan at 14% interest, and other loans.

He used the Avalanche Method to clear debt smartly. First, he paid the highest-interest credit card, saving ₹50,000+ in interest. Then, he spent only the minimum on all loans. After that, he focused on his car, personal, and education loans, becoming debt-free two years faster.
 

B. Snowball Method

When cleaning a messy room, we often don’t know where to start because the mess feels overwhelming. So, we begin with small tasks like putting things back in place, removing sheets, dusting, etc. As we complete each step, the room looks 20% cleaner, making the next steps more explicit.

Similarly, the Snowball Method pays off the smallest debt first while making minimum payments on the rest. Each cleared debt gives a sense of accomplishment, keeping you motivated. Over time, your progress builds momentum, and in 12–18 months, you’re completely debt-free, just like a clean, organised room!

For example, Vikram, a 29-year-old graphic designer, had ₹3 lakh in debt and did not know how to manage it. Using the Snowball Method, he paid his smallest ₹, 50,000, first. 

He started paying ₹12,500/month instead of ₹5,000, and within four months, the loan was cleared. He followed the same strategy to clear off other debts. By month 15, he was completely debt-free. 

Which One Should You Choose?

Out of the 2 methods, choose what you need. If your debts are scattered and you don’t know where to start, use the snowball method. If you want to save big on interest, go for the avalanche method. 

Step 4: Negotiate Like a Boss

‘Baatcheet se everything is possible!’ 

You might assume that interest rates and loan terms are fixed, but in reality, banks are more flexible than you think. Negotiating can help you save thousands. If your credit score is 750 or above, lenders are more likely to offer better terms. 

A strong repayment history builds trust. It gives you the leverage to request lower interest rates or better repayment options. All you need is a solid reason to prove you’re a reliable borrower. So, don’t hesitate. Talk to your lender and secure a better deal!

How to Negotiate Effectively:

1. Check Your Credit Score – If you have Experian, CIBIL, or Equifax score above 750, you can definitely get a much better deal than what you are offered now. Just give words to your thoughts.
   
   
2. Compare Offers – Never make a deal with the first lender you meet. Research the finance sector thoroughly. Banks are more likely to lower your rate if they know you have other options.
   
   
3. Highlight Your Repayment History – If you've been making timely payments, use this as proof of reliability. Banks reward responsible borrowers with better terms.
   
   
4. Ask for Fee Waivers – Banks add additional charges and if you are mindful enough you can request waivers on processing fees, late fees, or annual credit card charges.
   
   
5. Negotiate Loan Tenure – If you're struggling with high EMIs, negotiate for a longer repayment period to reduce monthly payments.

The key is to be confident and persistent. Even a 1–2% reduction in interest rates can lead to significant savings over time. If your bank refuses, consider refinancing with another lender offering better terms.

Step 5: Avoid Relapse

You have struggled a lot to clear off your debts. Don’t let any of your efforts go in vain. To avoid relapse, use these simple but effective behavioural hacks:

1. The ₹100 Daily Rule: Set aside ₹100 per day in a separate savings account. It may seem small, but over a year, this adds up to ₹36,500, and in 10 years, ₹3.6 lakh! This habit builds financial discipline and creates an emergency fund to prevent future debt.
   
   
2. Milestone Celebrations: Staying motivated is crucial. Reward yourself with a small treat (₹500) for every ₹50,000 you pay off. These rewards act as psychological boosts, keeping you engaged in your debt-free journey without derailing your progress.
   
   
3. Join a Community: Surrounding yourself with like-minded people makes a huge difference. Being part of a community keeps you motivated and helps you stay committed.
   
   

Conclusion

Paying off debt in 2025 isn’t just about earning more; it’s about playing it smart with your money. Every small step counts, and before you know it, you’ll be on your way to financial freedom. With easy steps like tracking your expenses, choosing the right repayment plan, and staying disciplined, clearing off debt won’t feel like a ‘bojh’.

Debt is just a temporary hurdle. With the right strategy, you’ll clear it and come out stronger. Stay consistent, celebrate small wins, and keep pushing forward. The journey may feel tough, but once you're debt-free, the peace of mind is priceless. Keep climbing; you’ve got this! ‘Sher Hai Tu, Roar Kar!’ 

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?