Debt Payoff Priority Calculator

Get a recommended priority order for paying off debts, building emergency fund, and investing.

By Konstantin Iakovlev · Updated April 2026 · Source: CFPB — Consumer Tools

Debt 1
$
%
$/mo
Debt 2
$
%
$/mo
Debt 3
$
%
$/mo
%
Emergency Fund Status

Total Debt

$48,000.00

Total Min Payments

$830.00

/month

Est. Payoff Timeline

7 years

Recommended Priority Order

1. Make minimum payments on all debts ($830.00/mo)
2. Pay off Credit Card (22.0% APR, $8,000.00)
3. Pay off Car Loan (6.0% APR, $15,000.00)
4. Contribute enough to get full employer 401(k) match
5. Build 3-6 month emergency fund
6. Pay off Student Loan (5.0% APR, $25,000.00)

Reasoning

Step 1Avoid late fees and credit score damage
Step 2At 22.0%, this costs more than investing would earn
Step 3At 6.0%, this costs more than investing would earn
Step 4This is a guaranteed 50-100% return on your money
Step 5Full financial safety net before aggressive investing
Step 6Low rate -- consider paying minimum and investing the rest if returns exceed 5.0%

Debt Summary

Credit Card (22.0%)$8,000.00
Car Loan (6.0%)$15,000.00
Student Loan (5.0%)$25,000.00
Weighted Average Rate8.1%
Total Debt$48,000.00

Use the Debt Payoff Priority Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Deciding which debt to attack first is where a lot of money is won or lost. Against the projected 2026 rate landscape, with credit card APRs averaging 22.5% and a 30-year fixed mortgage running around 6.5%, the order you pay things in can swing the total by thousands. This tool weighs your debts, your emergency savings goal, and your investment ambitions together and returns an optimized action plan.

The engine blends several approaches. High-interest balances such as credit cards come first, sequenced by either the debt snowball or the debt avalanche method depending on what you prefer. Your emergency fund is folded in next, with contributions recommended until you reach a safe threshold, typically 3-6 months of expenses, before lower-interest debt or investing gets full attention. Investment choices are then judged by their potential return against the guaranteed savings of paying down debt, assuming an average S&P 500 return of 8% for 2026.

Two errors do the most damage. Pouring everything into debt while skipping an emergency fund leaves you exposed the moment an unexpected bill lands. Sidelining investments has the opposite cost, forfeiting years of compounding on long-horizon goals like retirement. Weigh tax implications and your own comfort with risk alongside whatever the calculator suggests.

Example: Sarah's Financial Prioritization

  1. 1 Sarah has $10,000 in credit card debt at 24% APR, a $5,000 car loan at 6% APR, and wants a $10,000 emergency fund. She has $500 extra per month to apply to her financial goals.
  2. 2 The calculator first identifies the credit card as the highest interest debt. It then recommends allocating funds to build her emergency fund simultaneously, recognizing the importance of financial security. Once the emergency fund reaches a safe level and the credit card debt is significantly reduced, the focus shifts to the car loan.
  3. 3 Sarah's recommended priority is: 1. Allocate $200/month to emergency fund until $3,000 is reached. 2. Apply $300/month to credit card debt until paid off. 3. Increase emergency fund contributions to $300/month until $10,000 is reached. 4. Apply remaining $500/month to car loan. Once all debts are clear and the emergency fund is full, begin investing.
  4. 4 This strategy ensures Sarah builds a safety net while aggressively tackling her most expensive debt. By not waiting to build her emergency fund, she reduces financial stress. The phased approach allows her to celebrate smaller wins, maintaining motivation on her journey to financial independence.

Source: CFPB — Consumer Tools · Last updated: April 2026

Frequently Asked Questions

What is the best order to pay off debts?
The financially optimal order: first, any debt in collections threatening legal action. Then high-interest credit cards, personal loans, car loans, student loans, and mortgage last. Always make minimum payments on everything while throwing extra money at the highest-rate debt (avalanche method).
Should I save or pay off debt first?
Build a $1,000 mini emergency fund first, then aggressively pay high-interest debt (above 7-8%). Once high-interest debt is gone, build a full 3-6 month emergency fund. After that, invest while making regular payments on low-interest debt (below 5-6%).
Should I pay off my mortgage early or invest?
With mortgage rates of 6-7%, it is a close call. Mathematically, investing in a diversified portfolio has historically returned 8-10%, making investing slightly better. However, paying off the mortgage provides a guaranteed, risk-free return equal to your interest rate and enormous peace of mind.

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