Key takeaways: 

  • Several options exist to pay off credit card debt and avoid taking out a loan. 
  • A home equity agreement offers the ability to tap home equity – without a loan or added monthly payments. 
  • Eliminating credit card debt can result in substantial savings, improved credit, the chance to get ahead and less stress. 

You know that carrying credit card debt is costly. You know you’d like to eliminate it. And you know you’d really prefer to avoid taking out a loan to do so, because, after all, that’s just replacing one debt with another. 

Fortunately, there are several no-loan options to pay off credit card debt. Take a look to see if one of these methods could work for you.  


Paying off credit card debt on your own, whenever possible, is always the best option. Take a careful look at your budget (yes, you need to have one in place for your household) and see if you can use the avalanche or snowball method to eliminate the debt.  

The avalanche method will generally get you out of debt quicker while saving more money, as you are eliminating the debt accruing the most interest first. But many people prefer eliminating entire debts, one at a time, as it can provide greater satisfaction and motivation. In that case, the snowball method can be a better option.  

Either method is good. Choose what works best for you. Whether you move forward with the snowball or avalanche strategy, accept that it likely won’t be easy, and will require some dedication and belt-tightening. But it will be worth it! 


If you have accumulated savings, you might consider using part of it to pay off high-interest debt. Paying off a credit card with a 20% interest rate can make good sense when weighing it against a savings account earning 5%. 

However, there are a few caveats. It’s extremely important to maintain an emergency fund for the inevitable unexpected expenses that make it all too easy to reach for a credit card. Many experts agree on gradually building the fund to the point where it could cover six to nine months of base living expenses – but any amount will help. It’s a good idea to have at least a small fund in place while you are paying off credit card debt. 

Also, withdrawing money from a retirement account is almost never a smart move. Those are tax-advantaged funds intended for your retirement years. Try hard to keep contributing to your retirement savings – even a small amount – when paying off credit card debt. If you are fortunate enough to work for an employer that offers matching funds in a sponsored retirement plan, do your best to take full advantage. Not doing so is like giving money away. 

Generate additional income 

If you haven’t accumulated enough savings to draw from, this might be the right time to generate additional income that you can devote to paying off your credit card debt. While not everyone is in a position to take on more work, many people take advantage of the current labor market by taking on additional hours at their current position, getting creative with a side hustle or finding a part-time position. 

Balance transfer 

Using a balance-transfer card can help some people pay off their credit card debt faster. The card is another credit card, but with a very low, or even zero, interest rate. The idea in obtaining one is to transfer your high-interest credit card debt to this card and then pay it off at the low rate. 

These credit cards are usually available only to those with very good credit. They also have strict promotional periods during which the low interest rate is offered. That’s often six to 12 months, but some cards offer promotional periods of up to 21 months. The key is to pay off the balance in full BEFORE that period expires. In addition, fees can sometimes be high with balance-transfer cards, so do your calculations carefully to be sure that the fees will not be more than the savings you’ll reap from doing the transfer.  

Home equity agreement 

A home equity agreement (HEA) is an ideal no-loan, non-debt option for many homeowners to obtain funds they can use to pay off debt. Many people have amassed significant amounts of equity in their homes over the past few years. The HEA provides a way to access that equity and use the cash productively. With an HEA, homeowners receive cash upfront in exchange for a portion of their home’s future value.   

Since the HEA is not a loan, there are no monthly payments and there is no interest rate to worry about. The qualification threshold is lower than for traditional loan products, often with flexible income requirements. Homeowners with an HEA continue to live in their home as usual and buy back the equity any time during the term of the agreement (10 years with Unlock’s HEA). While that often happens when they sell their home, homeowners with an Unlock HEA can make partial payments anytime during the term.  

Debt settlement 

Debt settlement reduces the principal balance you owe on unsecured debt, including credit card debt. It is not a panacea but can be a viable option for certain people and situations. It’s most helpful if you are having a hard time making even minimum payments, especially as a result of a major life event has severely impacted your finances – such as loss of your job, major and unexpected medical expenses, divorce or death of a family member.   

Debt settlement can negatively impact credit scores, but most people see them rebound quickly when they complete the program.  

Making the commitment to pay off your credit card debt may be hard, but the benefits are more than worth the effort. You’ll be able to use more of your money for the things that are most important to you, including savings. And by lowering your debt, you’ll likely improve your credit profile and credit scores. If you can eliminate credit card debt without replacing it with a loan, you will also save money on interest fees and avoid a new monthly payment. Whatever route you choose, you’ll be taking a key step forward financially.  

See an estimate of how much equity you could unlock from your home.  

The blog articles published by Unlock Technologies are available for informational purposes only and not considered legal or financial advice on any subject matter. The blogs should not be used as a substitute for legal or financial advice from a licensed attorney or financial professional. Links in our blog posts to third-party websites are provided as a convenience and are for informational purposes only; they do not constitute an endorsement of any products, services or opinions of the corporation, organization or individual. Unlock Technologies bears no responsibility for the accuracy, legality, or content of external sites or that of subsequent links.