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 and prioritizing debts based on interest rates and payment terms. Tools like debt management plans or debt snowball methods can help individuals systematically pay down their debts while maintaining essential living expenses.