Your guide to tackling debt smarter and faster in 2025
Published by Mint
Abhishek Kumar's role: Wrote this article
Abhishek Kumar, founder of SahajMoney, is the contributor credited on this guide, which sets out a three-step plan to cut household debt: list debts and pick a repayment method, free up cash, and stay disciplined with an emergency fund.
What Abhishek Kumar said
Where do I start if I want to get my debts under control?
I suggest starting with a full list. Write down every outstanding loan and card balance with its amount, interest rate and remaining tenure. It sounds basic, but most people have never seen the whole picture in one place, and that picture is what lets you decide what to repay first. Once the list exists, pick a repayment method you can actually stick to, free up cash to feed it, and then protect yourself from sliding back. I think of it as a three-step plan.
Snowball or avalanche: which repayment method should I pick?
Both work; they trade cost against motivation. The snowball method clears the smallest debt first while paying the minimum on the rest, giving quick wins that build momentum, though it may cost more in interest overall. The avalanche method attacks the loan with the highest interest rate first, which saves more interest but can take longer to feel like progress. I would choose the one that fits your temperament, because the plan you abandon saves nothing.
How do I free up money to repay debt faster?
There is no shortcut; repaying faster means finding more cash each month, by spending less, earning more or both. I suggest reviewing monthly outgoings for non-essentials such as eating out, unused subscriptions and impulse buys, renegotiating recurring costs like insurance or mobile plans, and adopting a few frugal habits. On the income side, a side activity such as freelancing, tutoring or selling things you no longer use adds cash and keeps the goal in view.
How do I avoid falling back into debt once I have paid it off?
I suggest building an emergency fund alongside the repayments, starting small and growing it, so the next surprise is met from savings rather than a credit card. Limiting card use in favour of cash or debit, and shopping from a list, curbs impulse spending. When income rises or an expense ends, I would route the difference straight into repayment. Marking milestones, such as closing a loan, helps keep the discipline going, and a regular review catches drift early.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on debt and loans
This Mint piece, written by Abhishek Kumar, starts from the RBI's June 2024 Financial Stability Report, which linked rising household debt mainly to more borrowers, with consumer loans above 40% of household debt. It sets out a three-step plan for the new year: listing debts and choosing the snowball or avalanche method, freeing up cash by cutting costs and adding income, and staying disciplined with an emergency fund and limited card use.
Publisher source
Your guide to tackling debt smarter and faster in 2025
