If your credit card debt or loan balance is overwhelming, you’re not alone.

According to CEIC research, UAE household debt - including credit card delinquency - reached 149.1 billion USD in 2025 (over 500 billion AED). Spread across the country’s 11.35 million population, that’s an average debt of over 40k AED per person.

And that figure includes children and seniors.

For working adults with mounting responsibilities, the real burden is often much higher. And with rising living costs, servicing bottomless loans creates more strain.

You can get out of debt and become financially free by facing the problem head on, sacrificing a few comforts, and asking for help. Get started with this step-by-step debt repayment guide. (Hint: Consolidation is the final and most important piece of the puzzle).

1. Calculate your total debt

You can’t properly address a problem you don’t fully understand. So knowing exactly how much you owe your lenders is the first step to redemption.

First, add up all your debt from credit cards, bank loans, and money you borrowed from friends or family. Next, calculate your debt-to-income (DTI) ratio.

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Debt-income ratio = Total debt/Total income

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A good debt income ratio is 0.5 or less. This basically means that your debt should never ever be more than half of your income at any time.

To enforce this standard in the formal sector, the UAE central bank prohibits institutional lenders from giving more loans to individuals with up to 0.5 debt income ratio. But with informal loans, like money from friends and family, there’s less scrutiny.

Example: If you earn 180,000 AED yearly and your debt is 80,000 AED, your debt-to-income ratio is ~0.4 (good). But if you earn that same amount and your debt is 250,000 AED, your debt-to-income ratio is ~1.4 (bad).

Whatever your debt burden is, you’ve still got some work to do to become debt-free. But confirming your exact starting point will let you know just how much work there is to do.

2. Build healthy spending habits

The bad habits that got you into the debt you’re in need to go, or else you’ll find yourself right back at square one in no time.

If you consistently spend more than you earn, take a step back. If you’re used to taking out loans for non-essentials like expensive vacations and the latest gadgets, no more.

And if impulse buys that drive up your credit card bill are your Archilles heel, you need to start practicing delayed gratification. Sometimes, waiting a few weeks before buying an item will reveal that you never needed it in the first place. Or at the very least, saving towards the purchase instead of borrowing for it will keep your finances more stable.

Granted, bad spending habits aren’t the only reason people land in heavy debt. Unforeseen circumstances like health emergencies, property damage, or job loss are also potential factors.

But whatever the reason you’re wallowing in debt now is, you still need to make changes to prevent it from piling up.

3. Avoid new debt

Adding new debt to your existing liability is like pouring kerosine on a raging fire—it will only get worse. So, cut out all non-essentials (holidays, fine dining, impulse shopping, etc.) from your expenses and focus on core needs (rent, food, light bill).

And while you’re in repayment mode, avoid all fresh borrowing unless it’s absolutely unavoidable. Even small, “harmless” credit purchases can erode months of progress. When you’ve paid off most or all of your existing debt, you can then explore new loans with a healthier approach.

For example:

• Once you pay off your mortgage, taking a modest car loan that fits comfortably within your income isn’t so bad.
• If you’ve cleared all personal loans, using a credit card responsibly (paying the full balance monthly) can help rebuild your credit score while earning rewards.

Pro tip: Whatever you do, remember that the UAE central bank caps your debt burden ratio at 50% and stay well below that limit. This gives you some breathing space and keeps future borrowing options open.

The goal isn’t avoiding credit forever, it’s staying prudent and preventing reckless borrowing. The last thing you want is to claw your way out of debt only to be dragged back by one wrong move.

4. Pay more than the minimum payment

A huge credit card bill or endless loan payments don’t happen at once. They’re largely driven by one small but costly mistake: paying only the minimum amount due.

But here’s the thing; minimum payments are designed to keep you in debt longer. A huge chunk goes toward interest while only a small portion reduces the principal. So interest compounds and your balance snowballs.

The solution? Pay more than the minimum payment whenever possible. Even a small increase to the required amount can reduce the principal, lower the total interest paid, and shorten your repayment period.

Can’t afford to pay more than the minimum? Revisit point 2, tighten your budget, and look for areas to free up extra cash.

Then, redirect every extra Dirham toward servicing your debt.

5. Settle smaller debts first

On a long repayment journey, motivation matters more than you may realize. That’s where the snowball strategy comes in—paying off your debts in bits, starting from the smallest.

To do this effectively, outline all the loans you’ve taken out and rank them from smallest to largest. You can then repay them in that order, while still maintaining minimum payments on the others.

This strategy works because it boosts morale. Clear a small balance quickly, get a feeling of accomplishment. Rinse and repeat.

For each debt you clear, you free up cash flow, reduce pressure on yourself, and build confidence. And the freed-up cash? Simply roll into the next debt.

As you gradually work your way up to the bigger loans, you’ll be surprised at how quickly progress compounds. What once felt overwhelming starts to look manageable, and before you know it, it’ll all be over.

6. Increase your earnings

Spending less helps stabilize finances, but there are only so much expenses you can cut. Meanwhile, income has no fixed limit. Speed up your debt payoff by increasing your earnings too.

Even a temporary income boost (3 months to a year) can significantly shorten your repayment timeline. So, here are some practical, realistic ways to earn more:

• Take on part-time gigs or freelance work.
• Start a side business using an existing skill (baking, hairstyling, makeup, etc.)
• Ask for a pay raise or apply to better-paying jobs.
• Remind people who owe you to pay  back.

The key is being intentional. Instead of spending all your extra income on lifestyle upgrades, channel it toward your debt.

7. Downsize strategically

Downsizing isn’t punishment, it’s a temporary sacrifice that gets you closer to financial freedom, faster.

• Housing: If rent is swallowing most of your income, consider moving to a smaller apartment or more affordable area. Renegotiating your lease or staying with friends or family till your debt is paid off are also viable alternatives.
• Dispensable assets: Sell items you no longer use like electronics, designer bags, and furniture.
• Car: If you have one or more cars, consider selling. This one decision can reduce your expenses dramatically—fuel, insurance, parking costs, repairs, auto loan, etc. Maintaining only one car or using public transport for a while may be uncomfortable, but the end result will be worth it.

Remember, downsizing is a reset, not a life sentence.

8. Ask family and friends for interest-free loans

If you have a close friend or trusted family member who’s financially stable, consider asking them for an interest-free loan to consolidate or clear high-interest debt.

Getting such a favour will significantly reduce the pressure of compounding interest, but you must not take it lightly. Show responsibility by:

• Borrowing only what you truly need.
• Defining clear repayment terms upfront.
• Staying true to your word.
• Being transparent and communicating any issues early.

Money can strain relationships, and you want to solve a financial problem, not burn a bridge.

9. Discuss with your bank

Avoiding your bank when you’re struggling may feel like the right thing to do, but it’s actually counterproductive. Why? Because banks typically offer restructuring, repayment support, and consolidation options to make debt more manageable.

And, the earlier you ask for help, the more options you have, as compared to when you’re already neck deep.

For example, Emirates NBD offers debt management and restructuring solutions designed to reduce financial strain and help customers regain control.

Debt consolidation: The ultimate repayment strategy

While the steps outlined above are key to becoming debt free, consolidation simplifies and speeds up the whole process.

Debt consolidation involves paying off one or multiple debts with a single, more manageable loan. From balance transfers to mortgage and auto refinancing, this method eases financial pressure and confusion.

But don’t just choose any provider; compare rates and check fees first. Ideally, the new loan should offer a lower or zero interest rate, longer repayment term, or simplified payment schedule.

Not sure where to start? Emirates NBD One Pay is one of the best options we’ve found. It lets you make all your loan and credit card payments via one easy-to-manage payment plan. It also gives you preferential interest rates, higher loan eligibility, and a premium credit card for the first year.

Still want to compare offers from other providers? Use Daleel.

References: CEIC, Global Media Insight

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