BUILD MOMENTUM, ONE BALANCE AT A TIME
Start with the smallest.
Build your momentum.
The debt snowball method gives every extra dollar a clear starting point: your smallest debt. See how that approach fits your balances and monthly funding.
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How the debt snowball works
List debts from smallest balance to largest. Pay at least the required minimum on each, then direct available extra money toward the smallest. When that debt is cleared, move the freed payment amount to the next balance while maintaining the payments on the rest.
Why choose a smallest-first approach?
Closing a balance can provide a visible milestone and reduce the number of debts you manage. The tradeoff is interest: a larger, higher-rate debt may continue accruing while you tackle a smaller one. Compare the result with the debt avalanche method before choosing.
Turn your list into a plan
Enter your balances, rates, minimum payments, and due dates in DebtLiftoff. Set your funding, compare snowball and avalanche forecasts, and record your payments as you go. Revisit the plan when your balances or available funding change.
ILLUSTRATIVE EXAMPLE
Put the method in context.
Imagine balances of $500 at 12%, $2,000 at 24%, and $5,000 at 8%. Snowball targets the $500 balance first, regardless of its rate. After covering all required minimums, an extra $100 goes toward that target. Once it is paid off, its former payment joins the money available for the next debt.
Questions before you start.
Does snowball always save the most interest?
No. Prioritizing the highest interest rate generally reduces interest more under otherwise equal conditions. Snowball emphasizes smaller-balance milestones.
What if I have a promotional deadline?
Review deferred-interest terms before following a balance-only order. A deadline can create a cost that a simple smallest-first list does not capture.
Learn more: CFPB: Two approaches to reducing debt. Educational information; forecasts are estimates, not guarantees.
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