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Debt Snowball Method

The debt snowball method is a way to pay off debt by sending extra money to the smallest balance first, while making the minimum payment on all other debts. Many people like this method because early wins can build debt payoff motivation and help them stay on track.

What Is the Debt Snowball Method?

The debt snowball method is an extra payment strategy that puts the smallest balance at the top of your list. When you pay off that first balance, you “roll” the amount you were paying into the next smallest debt. This creates momentum and easy-to-see progress.

How the Debt Snowball Method Works

  1. List all your debts
    Write down every balance, interest rate, and due date. Include any fees that apply.
  2. Sort your debts by balance
    Place the smallest balance first. Leave the largest balance for last.
  3. Set automatic minimum payments
    Automatic payments help you make on-time payments and avoid late fees.
  4. Send all extra money to the smallest balance
    This is your first target. Any extra funds go to that balance until it is fully paid.
  5. Roll payments to the next balance
    Once the smallest balance is gone, roll those payments to the next smallest balance. Repeat this pattern until all debts are paid.

Tips for Staying on Track

  • Keep a small emergency fund to help you stay steady during surprise expenses.
  • Review your budget each month.
  • Watch due dates closely to avoid late fees.
  • Adjust extra payments when your income or expenses change.

Some people use installment loans as part of a short-term financial plan. These products vary by state, and funds may be available as soon as the same day, where available and if approved. Visit your state page for details.

Pros of the Debt Snowball Method

  • Quick wins can increase motivation
  • Easy to follow
  • Works well for people who need visible progress
  • Helps build strong on-time payment habits

Cons to Consider

  • May cost more in interest than the avalanche method
  • Not always the fastest payoff strategy
  • Requires steady extra payments

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Summary

The debt snowball method focuses on the smallest balance first so you can build momentum and stay motivated. You list your debts, pay minimums, and roll payments as each balance is cleared. If you are exploring your financial options, you can apply online or visit a nearby LendNation store for more information about products available in your state.