<prompt> Human: Ive been reading a lot about debt stacking and debt snowball methods of paying down debt. Although useful in paying off debts, I think each has its own flaws and am thinking of using an approach that combines the two. Rather than focusing on just the lowest balance snowball or highest interest stacking, I want to determine where my money will have the greatest impact on monthly expenses. To determine my order, I take the outstanding loan balance and divide it by the monthly payment. I then rank each ratio from largest to smallest and pay off the largest one first. I would then use the monthly payment from each paid off loan to pay down the next loan on the list.Using my own student loans as an example:Loan 1: Balance - 13,000 6.55; Payment - 143; Ratio - 90.9Loan 2: Balance - 6,780 4.00; Payment - 50; Ratio - 135Loan 3: Balance - 16,500 3.25; Payment - 100; Ratio - 165Loan 4: Balance - 6,000 5.00; Payment - 66; Ratio - 90So the order I would pay off each loan would be 3, 2, 1, 4. The reason I ask is that I recently received a promotion at work and want to use the extra monthly income on reducing my familys debts we have more than the few listed above. What are the issues with using the above approach? Is it the most efficient way to determine order of debt payoff?tl;dr: Using ratio of outstanding balance to monthly payment to determine order of loan payoffs. What are the flaws?  <response>: Although the all money towards highest interest rate seems counter intuitive, it can become more clear if you think about it instead as holding a bunch of 1 loans. Right now you have13,000 one dollar loans at 6.55. 6,780 one dollar loans at 4 16,500 one dollar loans at 3.25 6,000 one dollar loans at 5. Of course you need to make the minimum payments, but after that, it always makes sense to put every single spare dollar to pay down one of the one dollar loans with the highest interest rate. Every dollar you put towards a 6.55 loan saves you 0.0655 every year. Every dollar you put towards a 3.25 loan only saves you 0.0325 each year. 