These are the most popular strategies Americans are using to pay off expensive debt

For many borrowers, paying off debt used to feel relatively straightforward: They would make their monthly payments, put a little extra toward the balances whenever possible and eventually work their way out of the red. But for borrowers carrying thousands of dollars in high-rate debt, that approach has become increasingly difficult to sustain. Right now, even the borrowers who consistently make their payments each month may find that interest charges are eating up any potential progress they would have made, leaving their balances stubbornly high.

And while strategies like cutting back expenses or picking up extra work on the side can help free up money for increased debt payments, those changes don't always provide enough financial room to gain real relief. When a significant portion of your income is already committed to increasingly expensive necessities like housing, groceries and utilities, finding hundreds of extra dollars to put toward credit card or loan balances can be a real challenge.

As a result, many borrowers are reconsidering how they approach debt repayment, looking beyond traditional budgeting methods for ways to reduce their balances and regain control of their finances. Some are making relatively simple adjustments, while others are exploring more substantial financial moves. But which strategies are they turning to most often?

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The most popular strategies Americans are using to pay off expensive debt now

A recent survey of Americans carrying at least $10,000 in unsecured debt, conducted by Freedom Debt Relief, found that borrowers are using a wide range of approaches to manage their balances. Here are some of the strategies gaining traction — and the potential trade-offs worth considering:

Cutting discretionary spending to free up repayment money

Right now, many borrowers are trying to find more room in their existing budgets to pay off debt. According to Freedom Debt Relief's survey, 41% of respondents have stopped dining out or ordering delivery, while 40% have eliminated unnecessary online shopping. Another 35% have switched to generic groceries and household products to reduce everyday expenses.

These adjustments can be effective because they free up money without requiring borrowers to take on additional debt or qualify for new financing. After all, redirecting even $100 or $200 each month toward a high-rate balance can help reduce interest costs over time.

The limitation to this approach, however, is that spending cuts can only go so far. Borrowers with substantial debt balances may need to incorporate additional strategies to make any meaningful progress.

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Selling belongings or finding additional income

Some borrowers are also looking beyond their monthly budgets to find more money for repayments. According to the survey, 31% of borrowers have sold unused belongings, while 15% have taken on a second job or side gig, in order to put more money toward their debts.

Selling unwanted items can provide extra cash that can immediately be put toward outstanding debt balances. Taking on additional employment, meanwhile, can generate recurring income that borrowers can dedicate to reducing their debts.

Neither approach is necessarily sustainable over the long term, though. Selling belongings provides a limited source of cash, and working additional hours can create other challenges, particularly for borrowers who are already balancing demanding schedules at their primary jobs.

Consolidating high-rate debt

Rather than simply finding more money for extra payments, some borrowers are trying to make their existing debt less expensive instead — and many are doing so by consolidating their debt.

Debt consolidation allows borrowers to combine multiple balances into one loan, typically with a lower interest rate than they're currently paying on their credit cards or personal loans. By rolling multiple debts into one lower-rate obligation, they can simplify the repayment process and potentially reduce the amount spent on interest.

Balance transfer credit cards offer another option for consolidating. This route can be especially useful for borrowers who qualify for 0% promotional balance transfer rates. These offers can temporarily eliminate interest charges on the balances that are transferred, making it easier to pay off what's owed.

Before taking either route, though, it's important to determine whether the new financing actually improves your repayment outlook. Extending your repayment term or continuing to accumulate credit card debt can undermine the potential savings.

Borrowing against home equity or retirement savings

Some borrowers are taking even more consequential steps to eliminate expensive debt, including tapping into home equity or retirement funds to pay off what's owed. Nearly one-third of Freedom Debt Relief's survey respondents report withdrawing retirement savings to repay debt within the previous year, while 24% have borrowed against home equity to consolidate balances.

Both approaches can provide access to substantial funds, but they also introduce significant risks. Retirement withdrawals, for example, can trigger taxes and early withdrawal penalties while reducing long-term investment growth. And, while home equity borrowing may offer access to lower interest rates, it also converts unsecured debt into debt backed by your property, potentially putting your home at risk if you default.

Negotiating with creditors or pursuing debt relief

Borrowers struggling to keep up with payments are also seeking assistance directly from creditors or through structured debt relief options. Creditors often offer hardship programs that can result in reduced interest rates or modified payment arrangements. Credit counseling agencies can also help borrowers arrange debt management plans that consolidate eligible payments and potentially lower interest costs.

For borrowers facing more serious financial difficulties, pursuing debt settlement — either on their own or with the help of a debt relief company — could make sense. This approach can help consumers experiencing financial hardship settle eligible unsecured debt for less than the full amount owed, with experienced professionals negotiating on their behalf. While results aren't guaranteed and delinquency can carry financial consequences, debt settlement may offer meaningful relief for those unable to repay their debts under the original terms.

The bottom line

Borrowers are approaching expensive debt from multiple directions right now, and for good reason. Inflation is rising, interest charges are elevated and borrowers are stretched thin, making it tough to tackle debt. While budgeting adjustments and additional income can help borrowers make some progress, those carrying substantial high-rate balances may need to consider options that address the cost or structure of their debt.

Before choosing any strategy, though, it's important to compare the total repayment costs and potential risks and determine whether the monthly payments or lump-sum settlements are realistic for your budget. After all, the most effective approach isn't necessarily the one that promises the fastest results, but the one that allows you to make consistent progress without creating more financial hurdles along the way.