ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The “snowball method, ” simply put, means paying off the smallest of all your loans as quickly as possible. Once that debt is paid, you take the money you were putting toward that payment and roll it onto the next-smallest debt owed. Ideally, this process would continue until all accounts are paid off.

Detailed explanation-2: -Which Debt Should You Pay Off First? Let’s cut straight to it: If you’ve got multiple debts, pay off the smallest debt first. That’s right-most “experts” out there say you have to start by paying on the debt with the highest interest rate first.

Detailed explanation-3: -With the debt snowball method, you reward yourself for wins along your debt payoff journey. You pay your smallest debt in full first, then roll the amount that was going toward that bill into paying off your next-biggest one.

Detailed explanation-4: -The debt avalanche method involves making minimum payments on all debt, then using any extra funds to pay off the debt with the highest interest rate. The debt snowball method involves making minimum payments on all debt, then paying off the smallest debts first before moving on to bigger ones.

Detailed explanation-5: -Pay more than the minimum. Pay more than once a month. Pay off your most expensive loan first. Consider the snowball method of paying off debt. Keep track of bills and pay them in less time. Shorten the length of your loan. Consolidate multiple debts.