Stressed out by high credit card balances or other loan payments? Two popular strategies for paying down debt are the “snowball” and the “avalanche” methods.
Snowball Method: Start by paying off the smallest of your loans first as quickly as possible. Once that debt is paid off, the funds that were going toward that loan roll over (or “snowball”) into the next smallest loan. This is good for seeing progress sooner than later.
Avalanche Method: Focus on paying on the loan with the highest interest rate first. When that debt is paid off, the funds that were going to that loan are now going to the loan with the next-highest interest rate. This is a good strategy for those who are patient and can potentially save you money over the course of the plan.