Field note 14 / 24·5 min
Choose a debt repayment order
The best plan combines the numbers with a schedule you can actually maintain.
Get the whole picture first
List balances, interest rates, minimum payments, and due dates. Keep essential living costs and required payments in view before assigning extra money. If you cannot meet these, prioritising debts can depend on local law and the consequences of non-payment; seek qualified local debt help.
Two common approaches
With minimum payments maintained on every debt, directing extra money towards the highest interest rate generally reduces interest cost under otherwise comparable terms. The smallest-balance approach clears a smaller debt first, which can make progress more visible but can cost more in interest.
When one balance is cleared, redirect its payment if your budget allows. Recheck for promotional rate changes, prepayment charges, and new borrowing, all of which can alter the comparison. No repayment order works merely because it has a catchy name. Choose a sustainable plan, automate cautiously, and contact a lender early if you expect to miss a payment.
Where an extra 100 has more effect
Assume two debts have fixed annual rates of 24% and 6%, each modelled monthly as annual rate ÷ 12, with no fees. Reducing the first balance by 100 before the next interest calculation avoids 2 of that month’s interest; reducing the second avoids 0.50.
Illustrative numbers, in consistent units.One thing to try
Create a private list of balances, rates, minimums, and due dates. Identify which debt is costliest per extra unit owed.
Under comparable fixed-rate terms, which use of an extra payment generally reduces interest most?
Source notes
These references support the general principles. Product terms and legal protections vary by country.
- How to reduce your debtUS Consumer Financial Protection Bureau · Checked 2026-11-03
For general education. Examples do not include every fee, tax, personal circumstance or local rule, and are not individual advice.