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Paying Off Debt: Snowball vs. Avalanche

Selecting the right debt repayment strategy is similar to choosing the right romantic comedy on Netflix. There are plenty of options when it comes to paying off debt.

Is there anything you recommend I start with?

The “snowball method” and the “avalanche method” are popular options. Both of these services help you manage your loans or credit cards so you can choose which ones you want to pay off faster – while continuing to pay the minimums on the rest. Your budget needs to include some extra cash for debt repayment. 

How do they differ?

Balance is the key to the snowball method. Starting with the smallest balance, you list all your debts. Start paying down your smallest debt first. Then the next-smallest. And so forth. Until everything is gone. 

Interest rates are the focus of the avalanche method. Sort your debts according to how much interest you are paying from highest to lowest. Regardless of how much you owe, begin paying down the debt with the highest interest rate.

Related: 5 Rights You Have When a Debt Collector Calls You

Same but different…

Sorta. Snowball and avalanche are both legit ways to pay off debt. Which one is best for you depends on how your debt makes you feel.

Paying off balances faster (no matter how small) motivates you to keep going. This is called the snowball method. Hence, if you have lots of small balances and/or you’ve lost momentum, you can revive yourself by canceling out entire loans. 

Related: Printable Debt Payment History Tracker

I’d like to hear your opinions.

Even though snowball is the most motivating strategy, it can also be the most costly. When it comes to paying down debt, interest is your greatest enemy. You can save more overall if you pay down the debts that cost the most to carry (aka the avalanche method).

When your largest debt is attached to your highest-interest debt, it may take a long time before you feel like you’re making any headway.

If you want to pay off debt, it’s not how you do it that matters most. The fact that you do it is what matters most. Consider the pros and cons. And choose one that you will actually stick to.

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