Snowballing, 2 techniques

moongarden

surely paying off in order of speed to clear them is going to cost more in total than paying off the highest interest first but has anyone worked an example of by how much?

lazy&indebt

It depends what the APR of everything is!

Kevicho

Surprisingly i dont think there is too much difference

The main idea behind clearing the smaller cards is purely down to motivation, the worst thing about starting on the road to debt freedom is fact that it is hardest in the first couple of months and if it seems you are going nowhere with it (which is not the case) then it is easy to slip down the rails

People have different methods, if the second method costs a little more over the long run (i have no figures to proove either way) but it keeps someone motivated and builds up there confidence then for some people i think it would work out better

I think we need to run some tests on both methods as i do have a sneaky suspicion that there is little between the two way

lazy&indebt

Kevicho wrote:

People have different methods, if the second method costs a little more over the long run (i have no figures to proove either way) but it keeps someone motivated and builds up there confidence then for some people i think it would work out better

of course, if paying off the smaller ones first keeps you motivated, then maybe your debts will cost you less in the long run if you can't stick to the traditional method? i.e. if you give the old method a crack (paying off higher APRs first) but you give up after a couple of months then you are no better than when you started. If you give the second method a crack (paying off smaller ones) then you are more likely to stick to it, thus chipping away for longer and not giving up - costing you less

amosworks

Dood, snowballing is highest interest rate first, the method of quickest repayment first is called CAM. You should research it from sources other than Cummuta too although he's good there are people who show you how to improve it further to make CAM much quicker than snowballing. I used CAM to get debt free and I became debt free about an hour ago lol

CLAPTON

amosworks

great news about being debt free


but are you really saying that paying off low interest rate debts is better than paying off high interest rates debts...all other things beiong equal?
(they never are of course)