GLOSSARY · DEBT & HOUSING

Debt snowball

A payoff order that pays the minimum on every debt and sends all extra money to the smallest balance first, regardless of interest rate, then rolls that payment to the next-smallest. It usually costs more interest than the avalanche order, but closing accounts early gives visible progress, which research links to a higher chance of finishing.

Also called: snowball method, smallest balance first
COMPUTE IT WITH YOUR NUMBERS
Debt payoff planner →If I put $X/month toward my debts, when am I debt-free and which order saves most?
LEARN IT PROPERLY
CHAPTER · UNDERSTANDING YOUR DEBT · FOUNDATIONSAvalanche or Snowball: Choosing a Payoff OrderCHAPTER · DEBT ELIMINATION STRATEGIES · STRATEGIESA Debt Payoff Roadmap
RELATED TERMS
Debt avalanche
SOURCES
All terms →The Library →