Snowball or avalanche?
In shortTwo ways to choose which debt to pay off first. Both work if you stick with it.
General information only. It isn't financial advice and doesn't know your situation.
Pay the minimum on every debt. Then put any extra toward one debt at a time. The question is which one goes first.
Snowball: the smallest balance first. You clear one quickly, and that win keeps you going.
Avalanche: the highest interest rate first. It usually costs the least interest overall.
Example: three debts
- Pay later plan
- $400, no interest
- Credit card
- $2,500 at 21% a year
- Personal loan
- $4,000 at 13% a year
Snowball starts with the $400 plan. Avalanche starts with the card, then the loan.
When one is paid off, add its payment to the next. What you pay keeps growing, like a snowball.
The best order is the one you'll keep doing. Pick one and stay with it.
In Stuffed, list each debt on Goals. Give the one you chose the extra under Each payday, pay, and the others their minimum.
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