Smart Ways to Vanish Your Debt Using the Snowball Method

By: Branden S.

Smart Ways to Vanish Your Debt Using the Snowball Method

When looking at credit bills, most people only pay attention to a number; specifically the total amount they currently owe in debt, and if that’s your priority, you are probably not getting far in getting rid of all your pending debt(s).

The snowball method, however, is one of the best techniques to help you pay off your first balance of short-term loan debt in the least six (6) months as compared to the other methods that usually take more than a year, even with the highest of APRs. If you are propelled by a quick win, then the snowball method is a better choice for you today.

What is the Snowball Method?

The Snowball Method is a strategy that is common for debt repayment.

This particular method focuses on paying your smallest debt balance before moving on to the larger ones which eventually eliminates your debts.

The quick wins from settling the smaller debts add motivation and keep you going until you are completely debt-free.

The main advantage of this method is the psychological boost it gives. When you see your debts vanishing little by little, it can increase your zeal to continue paying off more debts.

This can also be a pretty helpful strategy for paying off a pending cash advance loan.

How Does the Debt Snowball Method Work?

The Debt Snowball method is a “DIY” (do-it-yourself) debt reduction strategy through which one who owes debt on more than one account can pay them off starting from the smallest balances.

This strategy involves the following steps:

  1. List out all your unresolved debts
  2. Sort out all debts accordingly
  3. Pay extra attention to the smallest debts
  4. Redo
  5. Repeat the payment structure

Step #1: List out All Your Unresolved Debts

This step first starts by you listing out all your unresolved debts; this involves writing down the name of each online payday loan or credit card debt, its balance, and the minimum monthly payment owed by you

Now, supposedly these are debts, it should be written down like this:

  • An auto loan with a $5,000 balance and a $600 monthly payment.
  • An instant payday loan with a $1,000 balance and a $180 monthly payment.
  • A cash advance loan of $10,000 balance and a $200 monthly payment.

Please note that the above-listed debts are mere examples that can be used when following the Snowball Method.

Step #2: Sort out All Debts Accordingly

The next step involves you sorting out your debts accordingly and arranging them from the smallest to the most outstanding balance. Using the below example, you can re-arrange your list like:

  • An instant payday loan with a $1,000 balance and a $180 monthly payment.
  • An auto loan with a $5,000 balance and a $600 monthly payment.
  • A cash advance loan of $10,000 balance and a $200 monthly payment.

How Does the Debt Snowball Method Work

Step #3: Pay Extra Attention to the Smaller Debts

Now, you must pay up your monthly minimums to avoid late fees and dips in your credit score which could in turn affect your credit rating in a negative way.

Anytime you pay off a debt, use any additional debt repayment funds you have to put towards paying off another smallest debt.

Going back to the above-listed example in step #2, you would be paying the required minimums of $600 and $200 towards debts two (#2) and three (#3), respectively.

After making those minimum payments, let’s say you come across an extra $150 to accelerate the other debt repayment, you will need to add the $150 to the $180 monthly minimum you are already paying towards debt one (#1) (your low-balance personal loan).

Step #4: Redo Step #3

Redoing step #3 involves paying the most you can each month towards debt one (1) until your balance hits zero.

If you can be chipping in that extra $150, you’d have paid off your $1,000 balance within just four months. And now that your instant payday loan is of the past, it’s time to focus on your auto loan.

Again, continue paying the minimum towards debt three (3), but now, in addition to the $600 you were already paying towards debt two each month, including the $330 you had been putting into paying off debt one (1).

Now you’ve successfully snowballed your money and you can pay a banging $930 on your auto loan every single month.

Step #5: Repeat the Payment Structure in Step #4

Keep repeating the payment structure listed in step #4 until debt two (2) is gone. Then roll over your payments once more and take on the next debt on your list.

Now, keep this going, paying and rolling cash from one debt to the next up until you’ve cleared off every liability on your list.

Is the Debt Snowball Strategy Right for You?

If you are planning to be quick in settling your debts, then, the snowball method is a strategy that will be really helpful to quickly pay off the smallest debt and reduce the number of payments and accounts that you do have a hard time tracking

 Also, if your emotions have a strong effect on your behavior, then, you’ll stand to gain from the snowball method as this helps give motivation and build confidence in your ability to get out of debt.

Again, as you make progress with the Debt Snowball strategy, you will more likely stick with the plan and you will readily use it to address more important debts when it’s time to tackle them, especially when you’re swept over by what you owe on larger balances.

Refinancing Your Debt with InstantPaydayNV

Refinancing debts relate to the ability of a borrower to apply for a new loan or debt instrument (a tool used to raise capital) that has better terms than a previous contract to pay down a previous debt.

A possible example of debt refinancing would be applying for a new, cheaper online payday loan offer and using it to pay off the liabilities from an existing loan.

Payday loans are targeted towards customers who need quick cash with no credit check. When loan collectors can’t repay a certain loan, they may be forced to get a new short term loan offer to repay the original loan collected (this is sometimes referred to as “rolling over” the loan), which may, at times, come with an increase in the cost of borrowing.


The Debt Snowball method is just a simple approach for becoming debt-free.

That being said, if you are ready to let go of every single debt you owe this New Year quickly and easily, then the best thing for you to do is to sit down, make a plan and identify the right debt repayment strategy to use.

The best debt reduction method for you would be the one you will stick with till you have gotten all your debts under control; why? Well, because it provides early and visible results and thus creates a belief that repaying your debts is possible. The Snowball Method is one that has worked really well for so many people over time, and one that is definitely worth trying.

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