Should I close the highest-interest loan first or the smallest one?

Mathematically, attacking the highest-interest loan first (avalanche) saves the most interest. But if you have many small loans, the snowball method can give you quick wins and free up EMIs sooner. If you carry credit card debt, clear that first because its rate is usually much higher than a home or education loan.

How does the snowball effect work here?

Once a loan is closed, its EMI is not spent elsewhere — it is redirected to the next target loan. So your monthly outflow stays the same, but the remaining loans get bigger payments and close faster.

Can I add a home loan, a personal loan and a credit card together?

Yes. Add up to 5 loans, each with its own outstanding balance, interest rate and remaining tenure. The planner then ranks them under the strategy you choose and shows a single debt-free date.

Is this financial advice?

No. ByeToEMI is a calculator that shows how different payoff orders affect interest and time. Your lender's final numbers, prepayment rules and your own cash flow decide what is actually best for you.

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Which loan should you close first?

Add all your loans — home, personal, car, education, gold, business or credit card outstanding. Pick a payoff strategy and see the single debt-free date that frees you the fastest.

Your loans

2 of 5

Outstanding principal

Interest rate

% per year

Remaining years

Extra months

EMI ≈ ₹30,930 / month · clears in 240 months

Typical home loans: ₹5 L – ₹3 Cr · 8% – 11% · 10 – 30 years. These are guidelines only — any value inside the calculator limits works.

Outstanding principal

Interest rate

% per year

Remaining years

Extra months

EMI ≈ ₹13,663 / month · clears in 48 months

Typical personal loans: ₹50 K – ₹40 L · 10% – 24% · 1 – 6 years. These are guidelines only — any value inside the calculator limits works.

Plan settings

Strategy

Extra amount you can pay every month₹/month

This stays the same until you are debt-free. As each loan closes, that EMI is redirected to the next target.

These results are mathematical estimates. Your lender's EMI, fees, taxes and prepayment charges may differ. Read the full financial disclaimer.

Recommendation

Recommended: Pay Personal loan first because it has the highest interest rate at 14%. This approach is expected to save the most interest.

All three strategies currently begin with Personal loan because it has both the highest interest rate and the smallest balance. Their payoff schedules are identical, so the results below are the same for every strategy.

Debt-free date

Mar 2037

9y 7m earlier

Put every extra rupee toward Personal loan first (highest interest rate first). You become debt-free 9y 7m earlier saving ₹19.30 L in interest.

TodayBaseline: Oct 2046

Plan takes 10y 5m versus 20 years with no extra payment.

Interest saved

₹19.30 L

Total interest paid

₹21.49 L

Monthly commitment

₹49,593

Total paid

₹61.49 L

Compare all three strategies

Your loan details stay exactly as entered — switching strategy only changes where the extra money goes.

Debt-free date, total interest and first loan closure for each payoff strategy
Strategy	First target	Debt-free	Total interest	Interest saved	vs Avalanche	First closure
Save the most interest (Avalanche)ShowingLowest interest	Personal loan	Mar 2037	₹21.49 L	₹19.30 L	—	Personal loan · Jul 2029
Close the smallest balance first (Snowball)Lowest interest	Personal loan	Mar 2037	₹21.49 L	₹19.30 L	—	Personal loan · Jul 2029
Clear credit card debt firstLowest interest	Personal loan	Mar 2037	₹21.49 L	₹19.30 L	—	Personal loan · Jul 2029

All three strategies produce the same payoff schedule for these loans, so the outcomes above are identical.

Which loan closes when

Interest accrues once each month, required payments are made, then the extra money goes to the current target. A closed loan's EMI is redirected from the next month.

Closure month and interest saved for each loan under the selected strategy
Loan	Rate	Monthly payment	Closes (baseline)	Closes (plan)	Interest saved
Personal loan₹5.00 L outstanding	Personal 14%	₹13,663	Oct 2030	Jul 20291y 3m earlier	₹52.8K
Home loan₹35.00 L outstanding	Home 8.75%	₹30,930	Oct 2046	Mar 20379y 7m earlier	₹18.77 L

Three ways to prioritise multiple loans

Avalanche — put every extra rupee toward the highest-interest loan. This saves the most money overall.
Snowball — close the smallest balance first to free up its EMI quickly, then roll that EMI into the next loan.
Credit cards first — because credit card rates are often 18-48% a year, they are almost always the most expensive debt to carry.

Frequently asked questions

Should I close the highest-interest loan first or the smallest one?: Mathematically, attacking the highest-interest loan first (avalanche) saves the most interest. But if you have many small loans, the snowball method can give you quick wins and free up EMIs sooner. If you carry credit card debt, clear that first because its rate is usually much higher than a home or education loan.
How does the snowball effect work here?: Once a loan is closed, its EMI is not spent elsewhere — it is redirected to the next target loan. So your monthly outflow stays the same, but the remaining loans get bigger payments and close faster.
Can I add a home loan, a personal loan and a credit card together?: Yes. Add up to 5 loans, each with its own outstanding balance, interest rate and remaining tenure. The planner then ranks them under the strategy you choose and shows a single debt-free date.
Is this financial advice?: No. ByeToEMI is a calculator that shows how different payoff orders affect interest and time. Your lender's final numbers, prepayment rules and your own cash flow decide what is actually best for you.

Last reviewed: 1 September 2026

ByeToEMI provides indicative calculations for educational and planning purposes. Actual lender calculations, charges, interest-rate changes and repayment schedules may differ. ByeToEMI is not a lender, loan broker or financial advisor.