Paying off debt is one of the most impactful financial steps you can take. When you carry a balance on a high-interest loan or credit card, a significant portion of each payment goes toward interest rather than reducing the principal. Understanding how much interest you are paying and how long your debt will last is key to creating a realistic payoff plan.

The time to pay off a debt depends on three factors: the balance, the interest rate, and the monthly payment amount. If your payment barely covers the interest charges, it can take decades to become debt-free and you may end up paying far more in interest than the original balance. Increasing your payment even slightly can make a dramatic difference.

Two popular debt payoff strategies are the avalanche method, which targets the highest interest rate debt first to minimize total interest, and the snowball method, which targets the smallest balance first for quick wins and motivation. Both are effective, and the best choice depends on your personality and financial goals.