Step 1: list every debt
A payoff plan starts with one table: each debt with its balance, interest rate and minimum payment. Credit card, personal loan, car finance, buy now pay later, money borrowed from family — all in one place. You will find the figures in your agreement or in your banking app. The example used below:
| Debt | Balance | Rate | Minimum |
|---|---|---|---|
| Personal loan | €1,500 | 12% | €60 |
| Credit card | €3,000 | 22% | €90 |
| Car finance | €7,000 | 6.5% | €160 |
Total balance: €11,500. Total minimum payments: €310 a month. These two numbers are enough to see the whole plan.
Step 2: every minimum paid on time
Minimum payments are the DEBT group in your budget. The norm is up to 15% of income, and with a mortgage up to 33%. On €3,200 net, the minimums in the example (€310) are 9.7% of income — every debt you clear frees up room, and its payment stays in the plan for the next one.
A payment made on time keeps your record clean on the Central Credit Register. Everything below happens on top of the minimums.
Step 3: choose the order — debt snowball or debt avalanche
Two proven payoff orders:
- Snowball — the smallest balance first. In the example that is the personal loan: it is paid off in 9 months, and its payment moves on to the next debt. A quick first win that is easy to keep going.
- Avalanche — the highest interest rate first. In the example that is the credit card (22%): less interest overall.
| Snowball | Avalanche | |
|---|---|---|
| First debt paid off | Personal loan (in 9 months) | Credit card (in 17 months) |
| Debt-free | in 31 months | in 31 months |
| Total interest | €1,601.21 | €1,469.60 |
The difference in interest is €131.61; the difference in the first win is 8 months. Both orders finish on the same date, because you pay the same amount each month. Choose the one you will stick with, and check your own numbers in the debt payoff calculator.
Step 4: add an extra amount each month
Minimum payments alone clear the debts in the example in 51 months, with €2,920.19 in interest. With an extra €120 a month and rolled-over payments you are debt-free 20 months sooner, and €1,318.98 of interest stays with you.
Where can the €120 come from? Most often from WANTS: a subscription review, lunch from home, shopping with a list. Specific amounts are in How to save money, and you can lay out the whole month in the budget template. Even €25 a month shortens the plan — enter that amount in the calculator and see the date.
Step 5: roll over every freed-up payment
When the first debt is paid off, its minimum payment goes straight to the next debt. The amount you put towards debt each month stays the same (€430), and each following debt shrinks faster and faster. That is what makes the snowball grow.
A bonus, a tax refund or something you sell is a chance for a bigger payment. An overpayment that cuts a debt's balance by 10% or more in one go earns bonus points in Groworth — a move that changes the picture straight away.
Pay off debt or save?
First a small cushion: one month's payment of each debt in a separate account, so a surprise bill is covered from savings. Then every extra euro goes to the debt with the highest rate, because savings rarely earn as much as a credit card charges. Once only cheap credit is left, save for your goal alongside it. Compare both paths: the loan calculator shows the interest an overpayment keeps with you.
If the repayments feel too big for your income, MABS — the Money Advice and Budgeting Service — gives free, confidential help in Ireland and can talk to lenders with you.
The plan on one page
The whole debt payoff plan fits in five lines worth keeping in view:
| Line | In the example |
|---|---|
| Total debt | €11,500 |
| Minimum payments each month | €310 |
| Extra each month | €120 |
| Order | Snowball: personal loan first |
| Debt-free | in 31 months |
Once a month, after payday, check two things: did every payment go out, and did the extra amount reach the first debt in line. When the first balance reaches zero, add its payment to the "extra" line and the plan rolls on.
Next: track your payoff every month
A plan works when you can see it. In Groworth, debts have their own screen: each balance, the payoff order and your debt-free date. A "zero debt" goal splits the way there into 100 levels, and you record payments and overpayments like any other spending — in the free budget app, two minutes a day.
Frequently asked questions
Which debt should I pay off first?
With the Snowball, the one with the smallest balance; with the Avalanche, the one with the highest interest rate. The Avalanche means less interest, the Snowball a faster first win. Every other debt gets its minimum each month.
Debt snowball or debt avalanche: which is better?
If the rates are similar, the Snowball: the first debt is gone sooner and it is easier to keep going. If one debt has a clearly higher rate, the Avalanche. The debt payoff calculator shows both orders with your numbers.
Should I pay off debt or save?
A small cushion for surprise bills first, then overpay the debt with the highest rate. Once only cheap credit is left, save for your goal alongside it.
How much extra should I pay each month?
Any amount helps. In the example, €120 a month gets you debt-free more than a year earlier. Start with an amount you can keep up every month and raise it with every freed-up payment.
Does debt consolidation help?
It helps when the new loan has a lower rate and keeps the term short. Enter both versions in the loan calculator and compare the total interest before you sign.