Debt Payoff Strategies Explained

Choosing Your Debt Payoff Strategy

There are two primary methods for paying off debt faster: the Avalanche and Snowball methods. Both work—the best one is the one you'll stick with.

**How it works:** Pay minimum on all debts, put extra money toward the highest interest rate debt first.

Pros:

Saves the most money in interest

Mathematically optimal

Faster total payoff time

Cons:

May take longer to see first debt eliminated

Can feel discouraging if highest-rate debt is also largest

**Best for:** Numbers-driven people who can stay motivated by knowing they're optimizing.

**How it works:** Pay minimum on all debts, put extra money toward the smallest balance first.

Pros:

Quick wins build momentum

Psychologically satisfying

Simplifies your finances faster

Cons:

Pays more total interest

Slightly longer overall payoff

**Best for:** People who need motivation from visible progress.

Some people find success combining methods:

Pay off any debt under $500 first (quick wins)

Then switch to avalanche for remaining debts

No matter which method you choose:

Stop adding new debt

Make payments automatic

Celebrate each payoff

Redirect freed payments to next debt