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There are two primary mathematical ways to pay off debt. Both work, but they optimize for different things:
With this method, you pay minimums on everything and throw all extra cash at the debt with the highest interest rate first. Mathematically, this is the "correct" choice because it minimizes the total interest you pay over time, getting you out of debt faster and cheaper.
With this method, you ignore interest rates and focus on the debt with the smallest balance. Knocking out small debts quickly gives you "quick wins" and momentum (the snowball effect), which can be crucial for staying motivated.
Generally, no. Mortgage interest rates are usually much lower than credit cards or personal loans. Focus on high-interest consumer debt first before attacking your home loan.
If you can only afford minimum payments, you will still pay off your debt eventually, but it will take much longer and cost significantly more in interest. Try to find even $20 or $50 extra per month—it makes a huge difference.
Yes! List each loan group (e.g., Loan A, Loan B) separately, as they often have different interest rates. This allows the Avalanche method to target the worst ones first.