You need to be upfront about it; and there is a difference. Saying "No" or "that you're not interested, or " there's no match," or "you're not feeling it," those are upfront and acceptable ways of saying no. And while we men HATE the stock answers or the "as a friend" stuff, usually if we're healthy about it, we just laugh it off. It at least gives a blatant "no hope" kind of answer. If he keeps pressing then, you still, firmly say no. If he KEEPS pressing and getting increasingly aggressive, then comes the time for a little more brashness.
If you say "I'm busy now" or something other than "I have a boyfriend"; ie if you give him any hope of a future, and he asks you out once every 6 months, he's not being a stalker. That's not what I mean. But if he starts following you around, etc, then you need to speak up, and yes, at this point you have a perfect excuse to avoid him.
Being honest with him is the best way to go. Now, while something like "Good god, no! I find you absolutely repulsive, you ugly freak!" may be "honest," it's also cruel.
I might not consider "fading out" with the guy until he gives you the creeps. I personally HATE being ignored. I don't chase girls down. I don't treat them with disrespect, and I don't get creepy.
So there's no reason to cross the street and run when I say a simple hello. It becomes awkward when I try to say hello, and I'm ignored or sneered at. I'm being avoided though I did nothing wrong, and I hate that feeling. I get enough of that already. So don't do that stuff until he starts being creepy.