Debt: the order to clear it in

Which debt should I repay first? Start with the highest interest rate while keeping every minimum payment current.

Which debt should I repay first?

Not by size, not by how much it worries you. Rate is what decides the cost of waiting.

Credit card interest is the emergency

A revolving credit card balance is the most expensive money most households will ever borrow, and interest is charged daily. Paying the "minimum due" keeps the account current while the balance barely moves. Clearing it outranks every investment, because no reliable investment returns 40% a year.

Avalanche or snowball

• Avalanche — highest rate first. Mathematically cheapest.
• Snowball — smallest balance first. Slower, but the early wins keep some people going.

Both work. Choose avalanche unless you know from experience that you need the momentum.

How an EMI is really split

Every EMI is part interest and part principal. Early in a loan the interest share dominates, which is why part-prepayments made in the first years remove far more total interest than the same amount paid near the end.

Debt versus investing

Compare the loan rate with the return you could reasonably expect, after tax. Against 40% card interest, there is no contest. Against an 8.5% home loan, continuing to invest while paying on schedule is usually defensible.

Before any of this, keep at least one month of essentials in savings — otherwise the next surprise goes straight back onto the card. Compare instalments and total interest with the EMI calculator, and follow the credit card debt clearing sequence.

Use RBI's consumer FAQs for borrower rights and complaint routes. Rates in this guide are illustrations, not current offers; read your lender's statement and charges.