Which debt repayment strategy focuses on paying off the loan with the highest interest rate first?

The high rate method is a debt repayment strategy that prioritizes paying off loans with the highest interest rates first. This approach is effective because it minimizes the overall interest paid over time. By tackling high-interest debt first, individuals can reduce the total debt burden more efficiently, as high-interest loans typically accumulate more interest costs quickly.

By focusing on high-rate debts, consumers can save money by decreasing the amount of time they spend paying off these more expensive loans. This method can be particularly beneficial for those with multiple debts, allowing them to systematically eliminate the most financially burdensome obligations first, which can lead to a faster path towards achieving financial freedom.

In contrast, the snowball method emphasizes paying off smaller debts first to build momentum, while the consolidation method combines multiple debts into a single loan, and the minimum payment method involves making only the bare minimum payments on all debts, which can often lead to prolonged repayment periods and increased interest costs. Each of those methods has its own advantages and drawbacks, but the high rate method focuses specifically on reducing high-interest payments upfront.