Personal loan or credit card debt — which to kill first?

Owing money in more than one place at once is common, and it comes with a very natural question: if there’s a little extra to put toward debt this month, where should it go? The instinct is often to attack whichever balance feels bigger, or whichever one has been around longer. Neither is the right filter.

The right filter is interest rate, almost every time.

Why rate beats size

A personal loan in India typically runs somewhere in the 10–18% annual range. A revolving credit card balance typically runs 30–42% annually. That gap is enormous — a card balance can cost two to three times as much per rupee owed as a personal loan does, every single month it’s carried.

That means an extra ₹5,000 put toward a high-rate card balance is doing far more work than the same ₹5,000 put toward a lower-rate personal loan, even if the personal loan balance is larger in absolute terms. Size feels more urgent. Rate is what’s actually expensive.

The one exception worth knowing

There’s a legitimate case for the opposite order: if the smaller debt is genuinely stressing you day to day and clearing it fast buys real peace of mind that keeps you consistent, that’s not irrational — it’s just optimizing for something other than pure interest cost. Just know that’s the trade-off being made, rather than assuming it’s also the cheaper path. It usually isn’t.

Putting a number on it

The honest way to decide is to look at both balances and both rates side by side, and work out roughly what each is costing per month if left untouched. Nine times out of ten, the answer point clearly at the card, not the loan — even when the loan is the one that looks bigger on paper.

Dette’s Debt Score shows your existing debt as part of the overall picture, so it’s easier to see where the expensive part of it actually sits, not just which balance feels the heaviest.