New Delhi, Sept. 13 -- When several loan payments arrive together, deciding where to start can feel confusing. Should you pay the smallest bill or tackle the debt that charges the most interest?

Two repayment methods offer different answers. Debt avalanche focuses on reducing interest costs. The debt snowball focuses on quick wins that encourage you to keep going.

Both start with the same rule: make the required payment on every debt. Then, use any extra money to pay off one debt faster.

Suppose you have two debts. You owe Rs.10,000 on a loan at 12% annual interest. You also owe Rs.40,000 on a credit card that charges 36% annual interest.

You have already made the required monthly payments on both. After meeting household expenses, yo...