How to Pay Off $30,000 Debt in One Year

Getting out of $30,000 in debt in one year sounds impossible if you’re only making minimum payments. But it’s not. People do it every day-often with less income than you think. The key isn’t luck or a windfall. It’s a plan, discipline, and a few smart moves most people ignore.

Know exactly what you owe

Start by listing every debt. Not just the balances. Include the interest rate, minimum payment, and creditor. Credit cards, personal loans, medical bills, even that $2,000 you borrowed from a friend-all of it. Most people skip this step and guess. That’s how they end up paying more in interest and losing months.

Let’s say you have:

• $12,000 on a credit card at 22% APR, $360/month minimum
• $8,000 on a personal loan at 11% APR, $250/month minimum
• $6,000 in medical debt at 0% interest, $150/month minimum
• $4,000 on another card at 24% APR, $120/month minimum

Your total minimum payments: $880/month. But you’re paying over $3,500 a year in interest alone. That’s money burning. Your goal isn’t just to pay $30,000. It’s to pay it off without losing half of it to fees and interest.

Stop adding to the debt

This is non-negotiable. If you keep charging $500 a month to your cards while trying to pay them off, you’re running in place. Close the cards. Not because you’re bad with money, but because your brain can’t handle temptation. You don’t need them. Use cash or a debit card. Set up automatic transfers to a savings account so you’re not tempted to spend it.

Cancel subscriptions you don’t use. Gym memberships, streaming services, apps you forgot about. The average Canadian spends $112 a month on unused subscriptions. That’s $1,344 a year you can redirect to debt.

Make a realistic budget-then break it

You need to free up $2,500 a month to pay off $30,000 in 12 months. That’s $30,000 ÷ 12. But you also have to cover rent, groceries, utilities, and transportation. So how do you get there?

Start with your take-home pay. Subtract essentials: rent, groceries, gas, insurance, phone. What’s left? That’s your debt payment pool. If it’s $1,200, you’re short $1,300. Now, look for areas to cut:

• Switch to a cheaper phone plan (save $40/month)
• Cook at home instead of eating out (save $300/month)
• Use public transit or carpool instead of driving (save $150/month)
• Sell unused gear-electronics, tools, clothes (one-time $800)
• Pick up a side gig-delivery, tutoring, freelance work (add $600/month)

That’s $1,130 extra. Add your $1,200, and you’re at $2,330. Close. Now, sell that old TV or bike. Pick up one extra shift a week. You’ll hit $2,500. It’s not easy. But it’s possible.

Use the avalanche method-not snowball

There are two popular ways to pay debt: avalanche and snowball. Snowball says pay off the smallest balance first for quick wins. Avalanche says pay off the highest interest rate first to save money.

For $30,000 in one year, avalanche wins. Every dollar you save on interest is a dollar you can put toward the next debt. Here’s how it works:

1. List debts by interest rate, highest to lowest.
2. Pay minimums on all debts except the one with the highest rate.
3. Pour every extra dollar into that highest-rate debt.
4. When it’s gone, roll that payment into the next highest-rate debt.

In our example:

• First: $4,000 card at 24% → pay $2,500/month until gone (about 1.6 months)
• Then: $12,000 card at 22% → now pay $2,500 + $120 = $2,620/month (about 4.6 months)
• Then: $8,000 loan at 11% → pay $2,500 + $250 = $2,750/month (about 2.9 months)
• Last: $6,000 medical debt at 0% → pay $2,500 + $150 = $2,650/month (about 2.3 months)

Total time: 11.4 months. You’ll save over $4,000 in interest compared to paying minimums. And you’ll be debt-free before year’s end.

Consolidate if it lowers your rate

If you have good credit (680+), a debt consolidation loan could help. You combine all debts into one loan with a lower interest rate. But only do this if the rate is at least 3-5% lower than your average current rate.

For example, if you qualify for a 9% personal loan for $30,000 over 12 months, your monthly payment would be $2,600. That’s less than the $2,750 you’d pay on the 24% card alone. And you’d cut your interest from over $5,000 to just $1,400.

But here’s the trap: if you consolidate but keep using your credit cards, you’ll end up with $60,000 in debt. That’s why consolidation only works if you close the accounts. And if your credit score is below 650, you won’t qualify for a good rate. In that case, skip it.

Use windfalls wisely

Tax refunds, bonuses, rebates, gifts-any extra cash goes straight to debt. No exceptions. If you get a $2,000 tax refund? Apply it to the highest-rate debt. Got a $500 birthday check? Same thing. Even $100 from selling old books adds up. Over a year, those add up to $3,000-$5,000. That’s 10-15% of your goal.

Track progress weekly

You don’t need fancy apps. Just a notebook or spreadsheet. Every Sunday, write down:

• How much you paid this week
• What your balance is now
• How much you saved in interest this week

Seeing the numbers drop is motivation. It’s not about being perfect. It’s about being consistent. Miss a week? Pay double next week. Don’t quit.

What if you can’t afford ,500/month?

If your income is too low to hit $2,500, you need to increase it. There’s no shortcut. Work more hours. Get a second job. Rent out a room. Start a side hustle. Even $500 extra a month cuts your timeline from 12 to 18 months. That’s still better than dragging it out for five years.

And if you’re truly stuck? Talk to a nonprofit credit counsellor. In Canada, organizations like Credit Canada or Debt Help Canada offer free advice. They can help you set up a Debt Management Plan (DMP). That’s not bankruptcy. It’s a negotiated plan where creditors lower your interest rates so you can pay off faster. You pay one monthly payment to them, and they distribute it. Fees are low-usually $25-$50/month. And they stop collection calls.

What happens if you fail?

If you miss a payment or fall behind, don’t panic. Don’t ignore it. Call your creditor. Most will work with you if you reach out early. Ask for a hardship plan. Even a 3-month pause or reduced payment can keep you on track without wrecking your credit.

And if you’re thinking about bankruptcy? It’s an option-but it’s a last resort. It stays on your credit report for 6-7 years. You’ll lose access to credit cards, mortgages, even some jobs. It’s not a reset button. It’s a scar.

You can do this

$30,000 in one year isn’t about being rich. It’s about being relentless. It’s about choosing your future over your comfort today. You won’t go out to dinner. You won’t buy new clothes. You’ll skip the vacation. But in 12 months, you’ll own your money. No more stress. No more calls from collectors. No more waking up dreading your balance.

Start today. List your debts. Close one card. Cut one expense. Make one extra dollar. That’s how it begins.