Compare debt payoff strategies and create your personalized debt elimination plan to become debt-free faster.
Pay minimum on all debts, then put extra money toward the smallest balance first. Once paid off, roll that payment to the next smallest debt.
Pay minimum on all debts, then put extra money toward the highest interest rate first. Mathematically optimal approach.
Pay minimums on all debts, then attack the smallest balance first.
Pay minimums on all debts, then attack the highest interest rate first.
💰 Key Insight: Both strategies use the same total payment amount. When you pay off one debt, that payment gets added to the next debt (creating a "snowball" or "avalanche" effect).
Additional amount beyond minimum payments
The average American household carries significant debt across multiple categories. Credit card debt is particularly dangerous due to high interest rates.
High-interest debt compounds against you. A $5,000 credit card balance at 18% APR takes 47 years to pay off with minimum payments!
💡 Key Point: Minimum payments are designed to keep you in debt forever. The credit card companies make billions from people who only pay minimums. Break the cycle!
| Debt Type | Typical APR | $10k Payoff Time | Total Interest |
|---|---|---|---|
| Credit Cards | 18-29% | 30+ years | $15,000+ |
| Personal Loans | 6-36% | 5-7 years | $2,000-8,000 |
| Auto Loans | 4-10% | 5-6 years | $1,200-3,000 |
| Student Loans | 3-7% | 10-25 years | $1,500-5,000 |
| Mortgages | 3-8% | 15-30 years | $3,000-15,000 |
Minimum payments are designed to keep you in debt forever. Always pay extra when possible.
Keep old cards open to maintain credit history length. Just don't use them.
Start with $1,000 emergency fund to avoid creating new debt during payoff.
Fix spending habits and budgeting issues, or you'll end up in debt again.
401k loans seem attractive but hurt your retirement and have risks if you lose your job.
Consolidating debt without changing spending habits often leads to even more debt.
Build safety net while paying debt
See how debt compounds against you
Track progress as debt decreases
Plan investments after debt payoff
Plan for debt-free retirement
Financial independence planning
Every day you wait costs you money in interest. Use our calculator above to create your personalized debt elimination plan and take the first step toward financial freedom.