Joined: 28 Jan 2016
Location: South Carolina
Depends on the person. In general I know of two theories. Snowballing or Stacking.
Snowballing is better for people who aren't good with money or need motivation to get things done. You list all your debts smallest to largest and attack the little one first, making minimum payments on the rest. As the little one gets paid off you move up the list adding everything you paid on the previous to the new plus the minimum balance of the new until the list is complete.
Stacking is better for the math nerd as it's mathamatically the most efficient. List all your debts based on interest rate. Attack the one with the highest interest rate making minimum payments on the rest and as with snowballing move down the interest rate list adding the previous payments to the new minimum payment.
If you're saying why do Snowball if Stacking is better, there have been studies that show checking items off the list gives a motivational boost that is more likely to have people succeed. I've seen one from the University of Minnesota and heard of several others.