How to get out of debt: a practical step-by-step plan

Debt feels heaviest when it is vague — a few loans here, a mobile loan there, a salary advance you have half-forgotten. The first relief comes not from paying it off, but from simply seeing it clearly. You cannot beat what you cannot measure.

Step 1: List every debt

Write down each thing you owe, with four details: who you owe, the balance, the interest rate, and the minimum repayment. Include everything — bank loans, mobile loans, salary advances, shop credit, money borrowed from family. Seeing the full list is uncomfortable, and it is the most important step.

Step 2: Choose a payoff method

There are two proven approaches. Both work — pick the one you will actually stick to:

• Avalanche — pay minimums on everything, then throw every extra shilling at the debt with the highest interest rate. This costs you the least money overall.
• Snowball — pay minimums on everything, then clear the smallest balance first. This costs slightly more, but the quick wins keep you motivated.

Mobile loans and salary advances often carry very high effective interest. If you are using the avalanche method, these usually belong at the top of your list.

Step 3: Stop the bleeding

You cannot pour water into a bucket with a hole. While you repay, the priority is to stop taking new debt to cover old debt — the cycle that traps most people. Build even a small emergency buffer so the next unexpected cost does not send you back to the loan app.

Step 4: Track every repayment

Record each payment and watch each balance fall. Progress you can see is progress you will continue. Mark due dates so a missed payment never quietly adds penalties.

Step 5: Redirect the freed-up money

When a debt is cleared, do not absorb that money back into spending. Send it straight to the next debt, then — once you are debt-free — to savings and investments. The same discipline that cleared the debt now builds your wealth.

Mtu na Pesa tracks what you owe and what you are owed — interest rates, due dates and repayments — in one unified liability view, so you always know exactly what your debt costs you.