Debt reduction refers to the process of decreasing the total amount of money owed by an individual or organization. This can be achieved through various methods, such as paying off loans, negotiating lower interest rates, or consolidating multiple debts into a single payment. The goal is to improve financial stability and reduce the burden of monthly payments. Effective debt reduction strategies often involve creating a budget, prioritizing high-interest debts, and making consistent payments. Tools like debt snowball or debt avalanche methods can help individuals systematically pay down their debts. Ultimately, successful debt reduction leads to greater financial freedom and less stress.