If you owe money on several accounts, a clear order of repayment keeps you moving. Two well-known approaches are the avalanche and the snowball methods.
The avalanche method
List your debts by interest rate. Pay the minimum on all of them and send every spare amount to the one with the highest rate. When it is cleared, move to the next. This usually costs the least interest overall.
The snowball method
List your debts by balance, smallest first. Clear the smallest balance quickly while paying minimums on the rest, then roll its payment into the next one. It may cost somewhat more interest, but quick wins help many people stay motivated.
Choosing between them
- Pick avalanche if you want the lowest total cost and can stay disciplined
- Pick snowball if you need early progress to keep going
- Either way, never skip the minimum payments
- Avoid taking on new debt while you repay the old
If you are struggling to meet payments, contact your lender early. Many offer hardship options, and free debt advice services can help you plan.