How Can I Lower the Interest I’m Paying on Debt?

Paying off debt is one of the best ways to improve your finances. There are two ways to reduce the amount you repay: pay down your balance faster or lower the interest rate you’re paying.

Interest is the price of borrowing money. The lower your interest rate, the more of each payment goes toward reducing your balance instead of interest. Over time, this can significantly reduce how much you pay.

Here are four practical steps you can take to lower the interest you’re paying on debt.

Improve your credit score

Your credit score is one of the biggest factors that determines your interest rate.

Lenders use your credit score and credit history to estimate the likelihood you'll repay your loan. Borrowers with higher credit scores often qualify for lower interest rates because lenders view them as less risky. Their credit score is a sign that they’ve managed credit responsibly in the past.

It can take time to improve your credit score, but there are some steps you can take now. On-time payments and the amount you owe are two of the biggest factors in most credit scores. Paying your bills on time and lowering your credit card balances can help improve your credit.

Ask your lender for a lower interest rate

Some lenders may lower your interest rate if you’ve built a strong payment history with them or if your financial situation has changed since you opened the account.

For example, you may qualify for a lower rate if your credit profile or credit score has improved. Many borrowers never ask, which could be costing them more money than necessary.

Consolidate your debt with a lower-interest loan

Some loans cost more than others.

According to the Federal Reserve, the average interest rate for unsecured credit cards among all borrowers was 21% APR at the end of the first quarter of 2026. The Federal Reserve also notes that a 24-month personal loan had an average 11.40% APR at the same time.

For example, if you owe $5,000 on a credit card with a 21% APR, you might be able to consolidate your balance into a two-year personal loan with an 11.40% APR. Your monthly payment would be about $234, and over the life of the loan, you’d pay about $616 in interest. By comparison, paying off the same $5,000 balance over two years at a 21% APR would cost about $1,170 in interest.

The only thing that changed is how that debt is carried.

Look into secured borrowing

Lenders charge different interest rates because each loan carries different levels of risk.

Credit cards and personal loans are usually unsecured. This means the borrower doesn’t put up any collateral to qualify for the loan. These loans are then more risky for the lender because they don’t have any collateral to cover losses if the borrower stops making payments.

Mortgages have lower interest rates. Home loans are secured loans backed by a home, which a lender can sell to recover losses if a borrower can’t repay.

Homeowners can get a home equity line of credit or HELOC. A HELOC lets homeowners borrow against the equity they’ve built in their home.

For example, the Aven Home Equity Visa Card is a home equity line of credit that can also be used as a credit card. Because the card is backed by home equity, Aven can provide lower interest rates than many traditional credit cards.¹

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This post is for informational purposes only and does not provide any financial, investment or tax advice. The information presented may not be suitable for your individual circumstances. Before making any financial decisions, consider consulting a qualified professional who can provide advice based on your specific situation.

Aven accounts are arranged by Aven Financial, Inc., dba "Aven" (or "AvenCard" in AR, ID, and PA). NMLS #2042345. See aven.com/licenses for licensing info.

Aven Visa Credit Cards are issued by Coastal Community Bank, pursuant to a license from Visa U.S.A., Inc. Aven accounts are made by Coastal Community Bank, Member FDIC. Equal Housing Lender. NMLS #462289 (NMLS Consumer Access Page). For additional information or complaints to Coastal Community Bank, visit www.federalreserveconsumerhelp.gov. For more information, you can also visit Coastal Community Bank’s privacy policy.

For licensing information, go to www.nmlsconsumeraccess.org

¹ Aven Home Equity Card is a home equity line of credit featuring fixed rate plans and a variable rate revolving line of credit, each with its own annual percentage rate ("APR"). APR is the cost of credit as a yearly rate and does not include costs other than interest. The variable APR for the revolving line of credit is based on the prime rate published by the Wall Street Journal in its Money Rates section ("Index") plus a margin that takes into account your creditworthiness, collateral value, etc. The Index as of June 17th, 2026, was 6.75%. The APR will not exceed 14.99%. Best rates for most qualified borrowers on primary residences. Headline rate available for credit limits of $175,000 or less. The fixed APR for fixed-term plans (aka Aven Simple Loans) is based on your variable APR and other factors at the time you agree to the Aven Simple Loan. The fixed APR will not change during the loan's term. For cash outs and balance transfers, there is a 2.5% fee on the amount transferred. Based on your property's location, there may be recording fees and in-person signing costs, including attorney fees. You are responsible for all recording fees and in-person signing costs, including attorney fees. See Pricing & Terms for details. Terms are subject to change.

If your Aven account is refinancing an existing lien, there is a fee of 2.5% of the total payoff amount of the existing lien. Your account may not be activated until the holder of your existing lien acknowledges receipt of your payoff amount.

Your applicable APR assumes a 0.25 percentage point discount for enrolling in AutoPay within 25 days after account opening and then staying enrolled. You are not required to enroll in AutoPay. See AutoPay Terms & Conditions for more details and restrictions.