Debt repayment: how to clear what you owe faster
If you’re juggling credit cards, loans, or overdrafts, a clear plan helps. This guide explains the two main payoff methods (snowball and avalanche) and how to choose.
Step 1: List every debt
- Balance
- Interest rate (APR)
- Minimum payment
- Due date
Step 2: Pick a method
Snowball method
Pay off the smallest balance first (for momentum), while paying minimums on the rest.
Avalanche method
Pay off the highest interest rate first (usually cheapest overall), while paying minimums on the rest.
Step 3: Set a monthly payoff budget
Choose an amount you can stick to monthly. Even £25–£50 extra can reduce interest and time.
Use the calculator
Use the Debt Repayment Calculator to estimate how long it could take and compare payoff approaches.
Common mistakes to avoid
- Only paying minimums if you can afford more
- Ignoring interest rates
- Not building a tiny emergency buffer
- Taking on new debt during payoff