How do I prioritize multiple debts with different interest rates?
Always pay at least the minimum on every debt to protect your credit, then direct extra dollars using one of two strategies. The avalanche targets the highest interest rate first, which minimizes total interest paid – the mathematically cheapest path. The snowball targets the smallest balance first for quick motivational wins. Either way, you make minimums on all the others and roll each freed-up payment into the next debt as balances disappear. When deciding, note any debt with special features: a 0% promo about to expire deserves attention before the rate jumps, and secured debts (car, home) carry collateral risk that can outweigh a slightly lower rate. Tax-deductible or low-rate debt like a mortgage generally goes last. Pick avalanche if you're rate-driven, snowball if you need momentum, and stay consistent. See the interest difference between methods at wealthserene.com/tools/debt-payoff.
Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →