Pay Down Debt with the Snowball Method

If you’re looking to quickly repay your debts, you’ve come to the right place!

An overwhelming part of personal finance is finding an effective way to pay off debt. It is okay to feel overwhelmed and seek assistance, because Consolidated Credit can help. One method that helps individuals pay off debt is the snowball method. But what makes it stand out among all the others? If you’re interested in learning more about what the snowball method is and how it can benefit you, read on!

What is the Debt Snowball Method?

The snowball method is a frequently used debt repayment strategy. The idea behind the snowball method is that you pay off your smallest balance debts first. Over time, you work your way up to paying down larger debts. But there’s more to it.

Your first step is to list all your debts from smallest to largest. It is also helpful to list payment amounts and withdrawal dates. Once you finish that, work on putting as much money as you can towards your lowest debt. Making extra money or spending less on frivolous expenses can help put more money toward debt. Next, move on to the next largest debt until you’re debt free.

The term “snowball” comes from the fact that you are gradually adding more to your payments. You start with small payments when you are working on paying down small debts. Then, you roll over the payments you were making to the next debt. Regardless of where you are in the process, you still make minimum payments on all debts.

Why Use this Method?

The snowball method is the fastest way to pay down debt. Since small debts are relatively easy to pay off, you’re getting rid of debt at a rapid rate. There is a little psychological boost you get when you successfully pay off debt. This boost helps push you through the process towards a debt free life. In addition to the boost, there are other advantages as well as disadvantages to this method. Let’s explore them below.


  • Motivation and Confidence. Because of the psychological boost you get, it is easier to stay motivated and confident. The little wins you get with each debt repayment go a long way. When you have large debt that you’re paying down, it is harder to feel like you’re accomplishing anything.
  • Get Finances Back on Track. Sometimes, people get into debt because their finances became sporadic at some point. The snowball method helps you stay focused and get back on track for a better financial future.
  • Simple. Other methods of debt repayment involve complex calculations. This is because you need to calculate which debt is most expensive. With the snowball method, the calculations are minimal.


  • Expensive. This method focuses on paying down small debt first, not the highest interest rate Using this method often means you’ll pay more interest. Larger debt will accrue more interest than smaller debt.
  • Credit Score Damage. Close out the accounts once they are paid off. While this will prevent you from getting into debt again, it can hurt your credit score. Closing accounts decreases your credit utilization ratio, thereby affecting your credit score.

What Debts Should I Pay with the Snowball Method?

The snowball method can effectively pay off virtually any debt. Although, there is one clear exception—mortgages. Below is a list of debt types for which the snowball method works:

  • Payday loans
  • Student loans
  • Medical expense
  • Car payment
  • Credit card debt
  • Home equity loan
  • Personal loan

When Should You Use the Snowball Method?

When it comes to debt repayment, for some individuals, the numbers adding up isn’t enough. Some individuals need the good feeling of accomplishment and success. If this is the case for you, the snowball method is the most ideal strategy. There is nothing wrong with needing the winning feeling if it keeps you on track!

Regularly monitoring your financial health is a way to ensure a bright future. Your financial plan should reflect your current standard of living. Reassess your financial health once per year, as a rule. However, if your standard of living ever changes, you should reassess at that point, too.

Reassessing and monitoring your finances is particularly important when paying off debt. In conjunction with debt payment, you should comfortably afford your lifestyle. If you can’t, it is easy to fall in a downward cycle of debt. Whenever balance between debt payments and your lifestyle waivers, you should reassess finances.

Not Sold on the Snowball Method?

The debt snowball method focuses on behaviour modification, not math. For some, behaviour modification is the best solution to tackling debt. Others need different methods to successfully do it.

A good alternative to the snowball method is the debt avalanche method. The debt avalanche method is ideal for individuals motivated to save money. Under this method, paying off debt with the highest interest comes first. Once the highest interest debt is gone, you move onto the debt with the next highest interest rate.

The snowball and debt avalanche method both work effectively. The method you choose depends entirely on your preferences. In fact, you may not choose to use either of these methods. You may find another method that suits your finances and lifestyle better. Be sure to do your research to find a method that works best for you!

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