Debt Glossary : Debt Snowball
The so-called debt snowball is a powerful method of paying off your debts more quickly. Simply put, it involves concentrating on one debt at a time until it's cleared, then transferring the amount of money you were paying onto the next debt. The amount you repay on each debt will get cumulatively larger, although your total monthly costs won't in fact change.
The advantage is that as each debt is cleared, more and more of your repayments go towards clearing debt rather than servicing interest charges.
For more information, see our article on the debt snowball method.
© 2008 Debt Sorter
