How To Get Out Of Debt With No Money

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How To Get Out Of Debt With No Money

Debt can be tough, especially without a stable income during these times when unemployment rates are 3.6%. But don’t worry, there’s hope! Here are some simple steps to help you break free from debt and start building a brighter future! 

Even when it looks hopeless, there are strategies you can take to start paying off debt. How can you get out of debt with bad credit or no income? The strategies below — including side hustles, debt consolidation, and free professional support — can help you start getting control of debt today. 

1. Make a comprehensive list of your debts

When working to get out of debt, it’s important to understand your situation clearly. For that reason, the first step is to sort through all your debts and understand the interest rates for each. 

 Make a comprehensive list of all debt including:

  • Student loans
  • Auto loans
  • Mortgage
  • Business loans
  • Credit card debt
  • Personal loans
  • Business loans
  • Cash advances

Generally, debt falls into one of three categories: revolving credit, secured debt, or unsecured debt. You might have one or all three. 

In addition to listing debt, note the interest rate on each debt account. You’ll usually want to focus on paying off the debt with the highest interest rate first. Generally, revolving credit like credit cards will have the highest interest rates so they will be near the top of most consumers’ lists. 

2. Prioritize your debt payments

If you’re working to reduce debt as quickly as possible, you may decide to pay off debts with the highest interest rates first. This, over time, will lead to greater savings each month as more of your payments will go to the original debt, not to interest. 

But there are different strategies to pay off debt, and you should choose the one that works best for you. For example, some consumers will choose to pay off debt from the smallest to the largest, so total accounts are cleared more quickly.  This is called the snowball method. Others will pay off the accounts with the highest interest rates first, which is called the avalanche method. Whichever strategy you choose, stick with it, as persistence toward your goal can pay off over time. 

3. Debt consolidation with a personal loan 

A debt consolidation loan can help you with a path to get the debt under control. Debt consolidation loans can even help with bad credit debt relief.  If you’re faced with a lot of debt, especially credit card debt, a debt consolidation loan can simplify payments and reduce interest rates. With a debt consolidation loan, all of your different debt is converted into a single debt payment. As the name implies, this consolidates your debt and simplifies payments.

Using personal loans as a debt consolidation tool can be a smart financial move for individuals who have multiple debts with high interest rates. By taking out a personal loan, individuals can use the funds to pay off their existing debts and consolidate them into one single loan. This can simplify monthly payments and potentially lower the overall interest rate, making it easier to manage and pay off debt.

Personal loans may be able to offer fixed repayment terms, allowing borrowers to create a structured plan to eliminate their debt within a specific timeframe. However, it’s important to carefully consider the terms and interest rates of the personal loan to ensure it is a financially viable option and to avoid acquiring more debt in the process.

MoneyLion can help!

MoneyLion offers a service to help you find personal loan offers based on the info you provide,  you can get matched with offers for up to $50,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you. You can also use the loan funds to pay off  other existing debts.

MoneyLion is here to help.

4. Create a budget and stick to it

Budgeting can seem boring but will give you more freedom long term. To create a budget, start by mapping out your wants versus your needs. Needs include housing and utility payments, a minimal food budget, and expenses for medicine or basic clothing. Wants are anything that isn’t completely necessary. This includes everything from more expensive food or clothing to cosmetics, entertainment, travel, or eating out. Be sure to include minimum payments on outstanding debt in the needs category. 

Then, decide how much you will allocate to each category each month for both wants and needs, and make sure it aligns with your usual monthly income. You may find, when you look through your budget, that there are areas you can reduce. This could be an extra weekly meal out or new clothing, which can then go to paying off debt. 

To stick to the budget, try to give yourself some wiggle room for treats or splurges. If you can, include a certain amount for miscellaneous items, including unexpected expenses that come up during the month. The other key to sticking to a budget is tracking everything so you know where you stand. Several excellent budget apps make it easier to track spending daily and weekly. 

5. Work toward improving your credit score

It’s important to consider ways to get out of debt without hurting your credit. If you’re faced with getting out of debt with bad credit, you’ll want to prioritize on-time payments in all forms of debt. If you don’t make at least the minimum payment on time, it could hurt your credit score. And of course, pay off debt as quickly as possible to help improve your credit score. Aim to use less than 30% of your total available credit. 

With a better credit score, you may be eligible for low-interest loans to help consolidate debt. More on that is below. 

MoneyLion can help! Credit Builder Plus (CB+) is our powerful credit-building membership, and it’s designed to help our members build or repair their credit, save, establish financial literacy and track their financial health. CB+ membership can help you build or improve your credit with access to a Credit Builder Plus loan. A Credit Builder Plus loan is a small loan that is held in a secure account while you make monthly payments. As you make payments, MLCB+ reports them to the major credit bureaus, which can help boost your credit score with on time payments. Plus, you could get access to some of the loan funds as soon as they are approved, so you can use them for whatever you need.

CB+ is a smart way to help improve your credit while paying off your debt. By improving your credit score, you could qualify for lower interest rates on future loans or refinancing options. 

6. Cut back on unnecessary expenditures

The average consumer can have 3 to 4 subscriptions, and many have more. Often, they’re for things we once used and no longer need. To cut back, start by reviewing all subscriptions and automatic payments. Cancel anything that is not essential. And if you last used the service several months ago, you may even be able to ask for a refund. 

Rather than only focusing on what you’re cutting out, consider what you’ll be adding in. There are so many options. Create activities that add richness to your life without extra expenses. Add extra days at the park with your kids. Most museums have free days each month for locals. Many theaters have free performances at certain times during the year. Host backyard potlucks instead of meeting friends at expensive restaurants. Invite a friend over for coffee at home. 

Even when cutting back you can add extra richness to your life. “The Year of Less” by Cait Flanders is one example of a book that offers inspiration on cutting back and leading a more fulfilling life. 

7. Negotiate with your creditors

It may feel like the creditors have all the control, but it never hurts to ask. Ask for lower interest rates or a payoff plan with each of your creditors. You’ll have better chances when negotiating if you can demonstrate strong credit. A professional may be able to help you reach an agreement with your creditors. 

8. Use professional services

Professional services are available to help people get out of debt. Debt relief programs help individuals get out of debt. Debt relief programs are companies that use debt settlement, to help you get out of debt while paying less than you owe. 

They offer this service for a fee, but many can help with large debts. Contact several and discuss your situation to see whether one will work for you. Look for a company that has low fees and is used to working with the type and amount of debt you’re carrying. 

Nonprofit credit counseling companies and pro-bono accountants also may be able to help you come up with a clear plan for getting out of debt with bad credit. Some also offer guidance on debt relief for bad credit or to build credit while paying off debt.

9. Have a plan for the future

Once you’re on a healthy financial path, it’s important to follow smart financial practices to avoid falling back into debt. Start by using a few simple and powerful financial practices in place: 

At the same time, put simple financial practices in place:

  • Building a reserve fund of three to six months’ income in savings.
    Set up auto payments for the minimum payment amount to pay all bills on time each month.
  • Keep a budget and stick to it.
  • Keep exploring new financial opportunities and income streams.
  • Don’t take on additional debt if you can’t afford to pay it back.
  • Only charge debt on credit cards that you can pay back each month.

Creating healthy financial habits is crucial for securing a stable and prosperous future. Just as we prioritize physical health, we must prioritize financial health. While this journey can be challenging at times, the rewards are significant!  Allowing you to achieve stability, pursue dreams, and provide for your loved ones. Ultimately, the goal is to shape a future full of possibilities and financial well-being!

You Can Do it! Get Out Of Debt With No Money

Getting out of debt with no money comes down to two actions: paying off debt by reducing expenses and increasing income. The lists here are a starting point. Use your creativity and find ways to both save and earn even a little more. Remember that every little bit adds up. But stay motivated! Keep prioritizing debt repayment and using the free resources in your community and online to help you get there.


What are the best strategies for getting out of debt without money?

To help get out of debt without money, you’ll want to make a repayment plan, get your budget in check, and find extra income sources to pay off debt more quickly.

What happens if I don’t pay my debt?

If you don’t pay the debt, the lender will initially contact you. Eventually, they may pass the debt to debt collection agents.

Are there any government assistance programs to help with debt?

Yes, there are some government assistance programs to help with debt for low-income families. Whether you qualify will depend on your current income and the government’s poverty line for your state. You can see more here.

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