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How to pay off debt: smallest debt first or highest interest first?

Guide 路 Last checked: 21 October 2026

If you owe money on more than one thing, it helps to have a plan for which one to clear first. There are two simple ways to do it. Both work. The best one is the one you'll stick with.

Step 1: Put the important bills first

Before choosing a method, make sure your priority debts are covered. These are the ones with the most serious consequences if they're missed, even if they're not the biggest. The government-backed MoneyHelper service lists them, including:

Credit cards, store cards, overdrafts, personal loans and catalogue debts are non-priority debts. Keep paying at least the minimum on all of them.

Step 2: Choose how to pay off the rest

Smallest debt first

Pay the minimum on everything, then put any extra money towards the debt with the smallest balance. When it's gone, move that payment on to the next smallest. Clearing a whole debt quickly can feel good and keep you going.

Highest interest first

Pay the minimum on everything, then put any extra money towards the debt with the highest interest rate (APR). This usually means you pay less interest overall.

Step 3: See your "paid off by" date

In QuidsUp, add each debt with its balance, interest rate and minimum payment, choose Smallest debt first or Highest interest first, and add any extra you can pay each month. We work out the order and the month you'll be paid off, and you can log each payment as you make it.

Open the debt planner

If it feels like too much

You don't have to sort it out alone. Free, confidential debt advice is available from MoneyHelper's debt advice locator, Citizens Advice, StepChange and National Debtline. If you're facing court action, bailiffs, disconnection or eviction, get advice straight away.

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Sources

This guide is general information, not financial advice.