# How to Pay Off These 4 Types of Debt
Eliminating debt requires strategy, not just willpower. Different debts demand different approaches. Credit cards, student loans, mortgages, and personal loans each carry unique interest rates and payoff timelines. Understanding how to tackle each one keeps you from wasting money on the wrong strategy.
Credit card debt costs the most. The average rate hovers around 20 percent annually. With revolving interest, minimum payments barely chip away at principal. Attack credit cards first using the avalanche method (highest rate first) or snowball method (smallest balance first). Pay far above minimums. On a $5,000 balance at 20 percent, minimum payments stretch repayment across a decade. Aggressive payments cut that to months.
Student loans sit in the middle. Federal loans average 5 to 8 percent. Private loans run higher. Federal loans offer income-driven repayment plans that cap monthly payments at 10 to 20 percent of discretionary income. If your employer offers loan forgiveness after a set period, that route beats aggressive payoff. For private student loans, refinancing through banks like SoFi or LendingClub can lower rates if your credit score tops 670.
Mortgages charge the lowest rates, typically 6 to 7 percent today. The 30-year timeline spreads payments thin. Extra principal payments work here. Adding $200 monthly to a $400,000 mortgage at 6.5 percent cuts ten years off the loan and saves $100,000 in interest. But this strategy only works if you have no higher-rate debt.
Personal loans average 10 to 15 percent. They're cheaper than credit cards but pricier than mortgages. Payoff windows run three to seven years. Focus energy here