Debt repayment strategies - Which is right for you?

Choosing a debt repayment strategy can make your journey to financial freedom more effective – and less stressful. Two of the most popular approaches are the debt snowball and the debt avalanche. Choosing the right one for you depends on your goals and what motivates you.

Key takeaways:

• With the debt snowball, quick wins boost motivation by paying off smallest balances first, but this approach may cost more in interest.

• Because the debt avalanche targets high-rate debts first, you may save on interest but this approach often requires stronger discipline.

• Both strategies involve paying minimums on all debts while focusing extra funds on one priority debt at a time.

• Commitment to your plan matters more than which method you choose.