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There are two popular methods for paying off debt. The mathematically best method is called the Avalanche method, and it has you pay the minimum amount for all debts, then throw as much money as possible at the one with the highest interest rate. This method saves you the most money over time, as it minimizes the amount of interest you have to pay.

The other method is called the Snowball method. Similar to the Avalanche method, you pay the minimum amount for all debts, but instead of paying off the highest interest, you focus on the debt with the smallest balance. This has the benefit of getting rid of smaller debts quickly, which can help with motivation. However, it allows higher-interest loans to accumulate interest, which can lead to paying more in the long run.

Debt Payment Strategy