<prompt> Human: Many thanks to lurking in this sub for the past couple years, I have managed to work my way into a position to significantly reduce my debt, but Im not sure the best way to do it. My current car is a lease that will mature in mid-April. The residual buyout 14K. I like this car and plan to drive it to the ground. I have the cash saved up to buy the car outright upon the end of the lease. At the same time the lease is ending I will have an additional 16K saved up. I have about 40K in student loans 5.53. I have a couple options. I can finance the car for 3 years at 2.49 updated from the 1.99 the credit union advertised two days ago. Rates changed Feb 1 and throw the full 30K at my student loans. I would probably refinance them at that point to see if I can get the interest rate down as its variable and keeps going up. Estimating refinancing 4.5 for 36 months, total monthly payments would be for both the car and student loans around 700, paid off in three years.I can pay the car off in cash and only put 16K towards the loans. This would free up about 400 a month from the car payment. Assuming I refinance around 4.5, student loan payments would be 750 month for three years or 460 month for five years. Or I can do some combination of the two where I finance part of the car, throw more money to the student loans and try to pay them down as quickly as possible. I have no other debts, my credit card is paid in full each month. My other bills car insurance, phone bill, rent, misc total about 600. My rent is extremely cheap as I live with my parents but I am planning on moving out in the next year, which is why I would like to be as close to debt free as possible.  <response>: Avalanche is always the best financial option, resulting in the least amount of interest paid in the end. Snowballing only makes sense when you cant discipline yourself to avalanche and would emotionally be helped by having fewer different loans to deal with. If your goal is to have the lowest amount of debt left over, avalanche is the way. 