Definition

With the debt snowball, you make minimum payments on everything and put extra money toward the smallest balance first, regardless of interest rate, then roll that payment into the next-smallest. It costs slightly more interest than the avalanche but the early wins build momentum and motivation, which helps many people stick with it.

1. Debt Avalanche

   A payoff strategy that targets the highest-interest debt first.
2. Annual Percentage Rate (APR)

   The yearly cost of borrowing, including interest and certain fees.