Are Your Debts Stressing You Out? Here’s How You Can Get Rid of Debt

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Debt is a word that most Filipinos have succumbed to especially if there’s an actual dire need for it. Many institutions have been put up strictly to this type of concern. The money lending business has been one of the hit businesses and establishments in the Philippines because of the fact that hundreds of thousands of people borrow money. But once you’re on the cycle, how can you get out or get rid of debt?


As per the Bangko Sentral ng Pilipinas, a majority of Filipino adults, whether working or not, borrow money. In fact, “most Filipinos have or had debt – 47.1% of adults borrow money, while 33.8% did so in the past and do not borrow anymore. Only 19.1% of adults do not borrow at all.”

So, it’s quite evident that borrowing money has been a common habit of the common people. Some people find it difficult to borrow money while some do not—repaying it however, is a different thing altogether.

Is there too much debt?

Most people do not know this but it is possible to be drowned in debt. Yes, too much debt is something and it what most often hammers down people at their lowest. However, having all of your debts at large is only possible if there is little-to-no debt and/or money management involved.

Here in the Philippines, there are debts that are common that almost half of the population has while there are the types of debt that only a handful of people have. But can you really get rid of debt? What are the best ways on how you can do so?

Family and friends debt

Family and friends debt
This image was taken from Pixabay | Pixabay.com | Man with no money in his pockets who wants to get rid of his debt

Probably the most common type for Filipinos would be debt to friends and family. We are emphasizing on the Filipino because in other countries, even if the person you owe money from is a relative, it is often brought to court—sometimes, the worst things happen.

Read: Can’t Say No to People Borrowing Money From You?

This is the most convenient way for Filipino working and non-working people to get money. It is the easiest, too. It is often, if not all the time, informal, it doesn’t involve any type of document and requirements.

Payment terms:

Usually, the payment terms are flexible, it’s just shame that keeps the debt altogether. However, having a longer time than the usual can actually break relationships which often lead to rivalry. In simpler terms, trust is what holds the agreement between the borrower and the lender.

What should you do?

Times that you are unable to pay cannot be avoided; especially if you have other loans or debts you need to attend to earlier. However, in the event that you are not able to pay a family member or a friend, don’t just hide—tell them about it.

Read: How to File a Case Against People Who Owe You Money

Be honest that you will not be able to settle what you promised to pay because of some issues. Even if they complain, they still can’t do anything about it at the moment and the important thing there is that you let them know. However, if you have any amount that you think would be fine for them, do not hesitate to repay them first.

Credit card debt

Credit card debt
This image was taken from Pixabay | Pixabay.com | Swiping a credit card

Although a majority of Filipino in the working class do not have credit cards, the credit card debt or bank debts come second as the most common type of debt Filipinos have. However, just recently, data from the Bangko Sentral ng Pilipinas shows that around 70 percent of Filipinos have credit or debit cards; 49 percent more than the previous figure preferred cashless payments while 29 percent remains traditional.

Read: Why Should You Use Your Credit Card When You Travel?

Fun fact: Credit card debt is pinning down Filipino people and the total debt, based on this year’s data by the Bangko Sentral ng Pilipinas, is P297.49 billion. Yes, that is how extravagant credit card debt is in the Philippines.

What makes it difficult to pay credit card debt?

One thing that most people forget whenever they don’t think twice in swiping is that there is something in credit cards that go unnoticed: the amount of interest and the accumulation. There actually are three (3) things that make it the most challenging debt types: low minimum monthly repayments, credit card fees, and high monthly interests.

How can you pay off your credit card debts?

Always remember that your credit card debt will not haunt you even in your final days. Eventually, you will be able to get out of that and you’ll have some for yourself. Here are some of the best tips on how you can handle your credit card debt.


Read: No Annual Fee Credit Cards in the Philippines

Manage your income and expense matrix

Always account for your income and consider your expenses too. If you would have to cut down on your expenses a little bit, do so. Afterwards, try to distinguish the amount that you are able to set aside for monthly repayments of your credit card.

By doing this, you will be able to have a specific time frame of when you can fully repay your credit card debt.

Be aware of how much balance you have to settle

Of course, you would have to know how much balance you have left that you need to settle. Immediately ask for the statement of account from your credit card provider (issuing bank). Then, list down your total outstanding balance plus interest so you have an idea on how long you can repay it.

A balance transfer credit card might be of good use

There’s a thing where you can move your credit card debt to a balance or a card that has 0 interest. By having this, you’ll be able to save from the overpriced interest rates credit cards have to offer.

Read: Low-Income Credit Cards for People Who Earn Php20, 000 or Less in a Month

Prioritize the credit card with the highest interest rate or with the lowest debt first

If you have multiple cards, you want to prioritize the debt that has large interest rates or the card that only has a few thousands left as balance. Debt snowballing is one of the few effective ways on how you can get rid of debt from your credit card balance.

The famous debt snowball can decrease the number of debts swifter; because the smaller debts get repaid first. The down side is that it could cost more over time because the longer it stays, the higher interest rates you’ll be subject to.

The debt stacking method, on the other hand, is another popular method that prioritizes the debt that has the highest interest rates. You would be suffering for a short period of time but your repayment time will be shorter.

Car and house loans

Car and house loans
This image was taken from Pixabay | Pixabay.com | Stressed adult who is managing her debt

Last but most definitely not the least would be repaying your “assets.” House and car loans are among the most fruitful types of debt because it gives you something that you can sell should the time come that you would need to be liquefied.

But how can you pay off these types of loans when the worst of the problems arrive?

Read: Tips for Car Loan Approval and in Managing your Car Loan

Refinance your house or your auto loan

There are some institutions that offer a loan to help you pay another loan. More so, these institutions and financing options offer less and lower interest rates with lower monthly repayment rates—it’s just that you will be paying for it longer.

A couple of banks in the Philippines offer this type of financing option. In addition to that, there are private money-lending businesses in the Philippines who give this type of help, too.

So, if you need some sort of aid in repaying either your auto or your house loan, you can try considering to proceed in this kind of avenue.

Read: Commercial Bank, Pag-IBIG, and SSS Housing Loans – What Are Their Differences?

Pay more than the monthly amortizations

When you have the luxury of extra money, ensure that you consider repaying your monthly amortization for your house and lot or car. Repaying it can be faster and although that it seems a pretty challenging thing, it’s going to be an advantage for you in the long run.

There are plenty of ways on how you can earn more than what you are earning right now. Here are some of the things you can do to increase your monthly income.

Read: 8 Best Business Ideas for Stay-at-Home People

Lastly, doing this can allow you to modify either your house or your car loan. Say you have been repaying at least 20 percent more in the past six (6) months; you can rearrange your loan so that you are comfortable for the rest of the payments remaining.

There are a ton of ways on how you can get rid of debt. Although most of them are challenging and quite difficult to achieve, you know that you got what it takes in order for  you to be free from debt so you can be comfortable with what you are earning while paying for the expenses and the debts you have. So, get rid of debt and be worry-free.


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