Shoralis Debt payoff order: which debt should you pay off first?
Write the math by interest rate
Not all debts are equal: credit-card purchase interest plus late fees costs more than a personal loan; a mortgage is usually the cheapest long-term debt. If every extra payment always goes to the debt with the highest annual cost, the same money produces the largest interest saving.
That is the only rule of ordering: list your debts by annual cost rate (interest + tax + fees) from largest to smallest, and hit the one at the top with the surplus. Never skip the minimum payments — a missed loan rewrites the order with penalty interest.
The snowball: motivation against math
The snowball method reverses the order: the smallest debt is closed first, and every installment it frees up is added to the next one. Mathematically the avalanche (most expensive first) wins; but research shows that closing a small debt lifts motivation noticeably and strengthens commitment to the plan.
The real difference between the two methods is the risk of abandoning the plan. A highly disciplined user saves more with the avalanche; with the snowball they get their "first victory" sooner. Quitting halfway resets the savings of both — choose the one that fits you best.
Restructuring: opportunity and trap
Closing a high-interest debt with a notably cheaper loan (consolidation) can be the right move — one installment, one thing to track, a lower cost. But as the term stretches, total interest can rise: the profit of restructuring is tested by comparing total repayment, not the monthly payment.
And if the new loan does not close the accounts of the debts it paid off, the freed limits get borrowed again and the debt in your hands doubles. Restructuring is a reset; if the spending habit does not change, the cycle continues.
See the price of the extra payment in the simulation
In Shoralis, enter every debt as a separate line item: amount, interest, term. Then add an extra payment to one decision — how many months does an extra 1,000 units a month pull the debt-free date forward, and how much does it add to 30-year net wealth?
Compare the two lives: in one, the debts flow on the current plan; in the other, there is an extra payment. When the gap becomes visible on the line, the opportunity cost of the extra payment (what if that money had been invested?) can be measured on the same chart.
Test this decision in the simulator
Run two lives side by side: with and without the decision. See the net-wealth gap in a projection of up to 30 years.
Open the simulator