Want to ditch debt in 2022? Here’s 6 top tricks

couple dancing because debt-free

Debt can be scary, there’s no doubt about that. But, with the right toolkit under your belt (and a little bit of self-discipline) 2022 could be the year that you ditch your personal debt and breathe a sigh of money management relief. 

So whether you’ve just started paying down your Christmas shopping on your credit card, are struggling to pay off your lingering car loan or just want to stop making endless personal loan repayments, we can help. 

Here are 6 of our top debt-ditching tricks which could see you become debt-free in 2022: 

1. Prioritise your repayments 

The golden rule when paying off personal debts like a personal loan, car loan or credit card is to make your repayments one of your financial priorities. You must be strict on yourself when it comes to paying down your debt otherwise you could be slapped with late payment fees and hefty interest charges. If remembering to make your repayments on time isn’t your strong suit, you may be able to set up automatic payments so you can simply set and forget knowing your repayment will be paid on time.  

2. Consider taking out a debt consolidation loan  

If you are heading into this year juggling multiple personal debts, a debt consolidation loan might be the financial product you need. These loans allow customers to roll their debts into one loan, meaning there is just one regular repayment to worry about. Not only do these loans make managing multiple debts easier, in some cases the interest rate on a debt consolidation loan may be lower than one or more of the products that are rolled into the loan - such as a high interest credit card. 

Just be mindful that your mortgage shouldn’t be rolled into a debt consolidation loan. This is because home loans are often longer loans (20-30 years) so by rolling in a mortgage you may end up paying more in interest over the life of the loan rather than less. 

Want to compare debt consolidation loans right now? Check out the table below!

Compare debt consolidation loans - rates updated daily

Search promoted personal loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2022
    Personal Loan

    Unsecured, Fixed

    interest rate
    comparison rate
    Monthly repayment
    4.99% p.a.to 14.99% p.a.
    4.99% p.a.to 14.99% p.a.based on $30,000
    over 5 years
    Go to site
  • placeholder
    Unsecured Personal Loan


    interest rate
    comparison rate
    Monthly repayment
    5.35% p.a.to 19.09% p.a.
    6.14% p.a.to 19.99% p.a.based on $30,000
    over 5 years
    Go to site

3. Make extra repayments at every opportunity when you can 

The ability to make free extra repayments is a crucial feature to look for when it comes to a personal loan or car loan. So if your lender allows you to make additional contributions on your current product, do so when you can. Similarly, avoid only making your minimum repayment on your credit card as that will mean the remainder of your balance may incur interest. Try and pay off your balance in full (or as much as you can) each month. 

It’s important to note that while it’s a good idea to make extra repayments on your debt, only do so if it's within your financial means. There’s no point making an extra repayment if it then means you can’t afford to pay your bills or buy groceries. Remember, some loans don’t allow customers to make redraws on extra repayments so once you make a payment you may not be able to get it back. 

4. Find a balance transfer credit card  

If you have credit card debt hanging over your head consider getting a balance transfer offer! Balance transfer credit cards allow customers to transfer some or all of their existing credit card debt onto a new card and pay it off over a period of time. Some credit card providers offer low rates or 0% during these balance transfer periods which can last anywhere from a few months to over two years. 

The catch with these card offers is to avoid making new purchases on the card. Your goal is to pay back your debt faster and to save on interest repayments. Once the balance transfer offer period is over, any remaining balance on the card will start to be charged interest which will either be at the standard purchase or cash advance rate.

5. Switch to low rate products

Refinancing your existing personal or car loan, or opting for a low rate credit card may be a good way to reduce the amount of interest you pay on your lending products in 2022. Just remember though, when switching products you will have to pay any fees charged by the provider which may include annual fees, monthly fees, application fees etc. Similarly there may also be fees involved when you move from your current lending product, such as exit fees. 

It’s a good idea to weigh up the cost of these fees against the potential savings you’ll make by switching to a low rate product. If the savings outweighs the total cost of fees, it’s a strong indicator that it may be time to switch. 

6. Don’t accrue more debt 

Your goal is to pay down your debt, not let it grow. So make 2022 a year where you don’t spend unnecessarily. Get out of the habit of comfort spending and instead put together a list of the things that you’ll be able to do when you are debt free.   

Also don’t forget, banks and lenders will be able to see a record your good payment habits so that when it comes time to borrow money in the future you’ll have shown that you can manage your money commitments well, and they might reward you with lower interest rates, rather than the opposite if you don’t make those changes now. By being smart when it comes to your debt now, you are helping your future self’s financial position as well. 

Looking for ways to save money this year? Check out our 22 ways to save in 2022 or jump over to our personal loan hub for more info on how to say farewell to your debt!

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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