Snowballing Debt Payments is a simple and effective strategy of reducing debt. when you payoff a debt you have an immediate increase to your free cash flow. What you do with this cash will have an impact on your financial journey. There are many options, but basically you can spend it, save it, or apply it towards your other debt.
By applying it to your debt (Snowballing your payments), you will pay more principal which will result in a reduction in the total interest you pay and decrease the time it takes to reach your goal of debt reduction.
1| When you pay off a debt, apply that payment to your remaining loans.
*depending on your strategy, you will either increase the payment of the loan with the Smallest Balance or the Highest Interest Rate, by the same payment amount as the paid off loan.
2| Repeat step 1 until you are out of debt.