Snowballing

Two confliting views

Since this calculator has been mentioned on various blogs, there has been some debate about the best way of snowballing your debts. Logic says that you should pay off your debts in interest order: paying the debts with the highest interest first, while paying the minimum on your other debts. However, it's been pointed out that some people prefer to pay off there smaller debts first, regardless of the interest rate.

In this way, rather then ordering your debts by interest rate, you order them by balance, and pay the smallest balance off first. The advantage of paying your debts off in this order is you get a bigger psychological boost by seeing the number of your debts reduce. Some people swear that one way is best, some people swear the other is best!

Personally, I don't care, as long as you reduce your debts! When I snowballed my debts I did it in interest order, which is why, in the past, this calculator has always done it that way. However, the idea of this site is to help people reduce debt and not get too tided up in how they do it! If you prefer to snowball your debts in order of balance, then you now have the option by selecting 'balance order'.