How to Pay Off Debt Faster
The two most popular debt repayment strategies are the debt avalanche and the debt snowball. Both work, but they prioritize debts differently. Our calculator lets you compare both strategies side by side to see which saves you more money and time.
Debt Avalanche Method
Pay minimums on all debts, then put extra money toward the debt with the highest interest rate first. This method minimizes total interest paid and is mathematically optimal. Best for people motivated by saving money.
Debt Snowball Method
Pay minimums on all debts, then put extra money toward the debt with the smallest balance first. You get quick wins as smaller debts are eliminated faster, which can be motivating. Popularized by Dave Ramsey. Best for people who need psychological momentum.
Average American Debt (2025)
- Credit card: $6,501 average balance, ~22% APR
- Student loans: $37,338 average balance, ~5-7% APR
- Auto loans: $23,792 average balance, ~6-7% APR
- Personal loans: $11,692 average balance, ~12% APR
The Power of Extra Payments
Even an extra $100/month can dramatically reduce your payoff timeline. For example, a $5,000 credit card at 22% APR with $150 minimum payments takes 47 months to pay off with $2,050 in interest. Adding just $100/month cuts it to 24 months and $1,030 in interest — saving you $1,020 and almost 2 years.
Tips to Accelerate Debt Payoff
- Always pay more than the minimum — minimum payments are designed to maximize interest for lenders
- Consider balance transfer cards with 0% APR introductory periods for credit card debt
- Direct any windfalls (tax refunds, bonuses) toward your target debt
- Cut one unnecessary expense and redirect the money to debt payments
- Once one debt is paid off, roll that payment into the next debt
- Don't take on new debt while paying off existing balances
Once you're debt-free, use our Savings Goal Calculator to start building your emergency fund, or explore the Retirement Calculator to put your freed-up cash to work for your future.