4. Snowball Method

The debt-snowball method is a debt lessening policy, where one having debt on more than one account starts paying off with the lowest amount first and then gradually paying the minimum on larger debts. Once the debt accounts with lower amount is settled the account holder can shift to the accounts withholding larger debt amounts.

For example, if one is having 3 credit cards with outstanding amounts of 1, 00, 000, 50, 0000 and 25, 0000, they can start paying off with 25, 000  and gradually proceed towards the higher amounts.

Beneath the scheme, additional cash is committed to pay debts with the least amount payable. As every lesser debt is reimbursed in full, the cash used to pay that debt is then provided towards making bonus payments on the next-smallest debt, and so on until all debts are repaid.

This technique has recently gained popularity and has been useful for many to repay their debts, but the method might not be too much of help for someone having massive debts.

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