What is a Snowball Payment Method and How Does it Work?

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The snowball payment method is a debt repayment strategy that involves prioritizing and paying off smaller debts first before moving on to larger debts. By focusing on quick wins and progress, it provides a psychological boost and helps individuals stay motivated throughout their debt repayment journey. This method works by listing debts in order of smallest to largest balance, making minimum payments on all debts, and allocating extra funds to pay off the smallest debt. As each debt is paid off, the amount available for repayment grows, creating a snowball effect that accelerates the debt repayment process.