Question

Explain, using complete sentences, how someone might snowball their debt according to the balance.

Explain, using complete sentences, the benefits to snowballing debt.

Answer 1

According to the snowball method, people must stipulate a monthly amount for the payments of their debts, and thus pay first the lower balance debt, once paid, use that amount that left the first debt free, in the second largest debt, and once paid, use the free money for the previous debts, to cancel the next highest, and so on, paying them until getting to cancel them all.


This method has several benefits, firstly it helps to settle the debts in an organized way, and in the shorter time possible, reducing the interest charges and fees, and also psychological help, since when people pay off their debts have mentally and financial tranquility.

Answer 2

Using the snowball method to pay off debt is fairly basic and simple. In this method you begin by clearing the smaller debts first. Once these are cleared you have more money that you can put towards them because you no longer have payments on the smaller debts. This method is simple and often helps eliminate debts quicker.