Manage your debt like a pro

Read time: 3 to 4 minutes

There’s a good chance you know a little something about debt—around 80% of Americans are paying off a mortgage, car, credit card, or other consumer loan.1 No matter what you owe, our tools and resources can help you manage debt. You’ll get a better understanding of it and learn how to handle yours like a pro.

Understanding your debt

Debt is a part of everyday life for most people. The average debt amount that Americans hold is $101,915.2 And it’s important to remember that there’s such a thing as good debt. 
 
One of the most common examples of good debt is taking out a mortgage on a house. With a mortgage, you can start to take ownership of a home, and you can improve your credit score by making your monthly payments on time. Tackling this type of debt gets you closer to your goals, like building your net worth. 
But what if your debt is bringing you down?
Carrying any type of debt can give you a lot to think about. Factors like a high interest rate, the amount of time it could take to pay the debt off, and how much risk you’re taking on can push you to consider how much a particular debt is helping or hurting you. 
 
For example, if the balance on a high-interest credit card is too high to make it possible to make more than the minimum payment every month, the interest rates can prolong your time to pay it off. And when your payments are tied up in interest every month, you can't put that money to work for you—such as saving more for your retirement or other goals. 
 
And if you’re juggling multiple types of debt—like a mortgage, credit card balance, student loans, and car loans—it may start to feel out of your control. No matter how you feel about your debt, we’ve got resources that can support you. 

Our debt payoff calculator can help

When you sign up for Vanguard Digital Advisor® or Vanguard Personal Advisor®, you’ll get access to our debt payoff calculator. This tool can: 
Help you organize your debt, so you can see the big picture. 
Compare two payment strategies, so you can get an idea of how you could be debt free sooner.
Recommend a strategy that might be the fastest way to get your debts paid off.
Saving time and money
We recommend the “avalanche” method to pay off your debt. This method prioritizes paying down your debt with the highest interest rate. At the same time, you continue making your minimum monthly payments on the rest of your debt. This means you’ll be paying less interest long term—which can save you both time and money.  
See the calculator in action
Angela is a hypothetical investor who enters her debt information into our debt payoff calculator. The calculator totals her monthly minimum payments for all her debt.
For illustrative purposes only.
When she continues with the calculator, it shows her the amount of interest she would pay if she just makes her minimum payments each month. It also tells her the amount of time it would take to become debt free. 
For illustrative purposes only.
Next, the calculator asks Angela to estimate how much extra she can afford to pay toward her highest-interest debt. Why? Because the calculator assumes that once Angela pays off that debt, she can roll her extra payments over to the debt with the next highest interest, until all her debt has been paid off. 
 
That’s the avalanche method. And in this example, Angela could save over $53,000 in interest and be out of debt over 10 years faster. 
For illustrative purposes only.

Let’s handle your debt together 

Our debt payoff calculator is available through both Digital Advisor and Personal Advisor. With Digital Advisor, you’ll get access to our expert online investment management. It only costs about $15 each year for every $10,000 we manage.3

But when you sign up for Personal Advisor,4 you’ll get access to our financial advisors for every step of the journey to becoming debt free.

Vanguard advisors are fiduciaries—so they're obligated to act in your best interests. Our advisors will get to know you and your financial situation. That way, they can answer any specific questions you may have about your debt or any other part of your financial plan.

Personal Advisor costs about $30 each year for every $10,000 we manage.5 So don’t wait. Sign up today so you can start saving time and money on your debt.

Manage debt with Vanguard advice
Whenever you invest, there’s a chance you could lose the money.

1Source: InvestorPlace. Drowning in Debt: The Hidden Tsunami Engulfing American Households. 2023. 

2Source: U.S. Bank. How to use debt to build wealth. 2023.

3Actual costs vary. Digital Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Digital Advisor’s annual net advisory fee is approximately 0.15% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants’ actual advisory fees will vary depending on your plan’s lineup and the revenue that Vanguard receives from those investments. Please see your plan fee disclosure notices for the applicable annual gross advisory fees that apply to your plan assets.

 4To be eligible for Personal Advisor, you must have one of the following: 

  • $250,000 or more in your employer-sponsored retirement plan at Vanguard. 
  • $50,000 or more in IRAs and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard. 
  • $250,000 total among your employer-sponsored retirement plan, IRAs, and taxable accounts—owned individually or as joint tenants with rights of survivorship—at Vanguard. 

5Actual costs vary. Personal Advisor will reduce your gross advisory fee by the amount of revenue (such as expense ratio rebates) that Vanguard (or a Vanguard affiliate) collects on your portfolio in order to calculate the net advisory fee. Personal Advisor's annual net advisory fee is approximately 0.30% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Your net advisory fee can also vary by enrolled account type. Plan participants' actual advisory fees will vary depending on your plan's lineup and the revenue that Vanguard receives from those investments. The plan fee disclosure notices detail applicable annual gross advisory fees.

Vanguard Digital Advisor's and Vanguard Personal Advisor’s services are provided solely by Vanguard Advisers, Inc. (VAI), a registered investment advisor. Please review the Vanguard Digital Advisor’s and Personal Advisor's  for important details about these services. Vanguard Digital Advisor’s and Personal Advisor's financial planning tools provide projections and goal forecasts, which are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.