Choose avalanche or snowball
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The idea in everyday life
Select a payoff order using both interest math and the behavior you can maintain.
Avalanche pays extra toward the highest interest rate first to reduce interest cost. Snowball targets the smallest balance first for an earlier payoff. Choose a method you can keep using.
One step at a time.
Use the sample or information you have permission to use. Keep your work as you go. You can pause between steps.
- 1
Sort the verified inventory once by APR and once by balance while keeping every minimum active.
- 2
Estimate the first payoff milestone and total interest under each method using conservative monthly extra cash.
- 3
Choose avalanche when cost reduction will keep you engaged, or snowball when closing an account quickly will strengthen follow-through.
- 4
Write tie-breakers for promotional expirations, secured-property risk, employer requirements, or court-ordered obligations.
See how it works.
Jordan starts with the avalanche method, then prioritizes the deferred-interest purchase because the plan would otherwise miss its full-payment deadline and trigger interest back to the purchase date. A true 0% introductory APR offer does not add interest for its promotional period afterward. Jordan checks the actual terms before changing the order.
Did you cover these?
- Your work includes a ranked payoff queue with the reason for the method and a clearly named first target.
- Check this common mistake: Changing targets whenever a statement, advertisement, or stressful phone call creates a new sense of urgency.
- You can explain why the first target outranks every other balance while all minimums remain protected.
What to finish
A ranked payoff queue with the reason for the method and a clearly named first target.
Watch for this
Changing targets whenever a statement, advertisement, or stressful phone call creates a new sense of urgency.
How can I tell I understand it?
You can explain why the first target outranks every other balance while all minimums remain protected.
Quick knowledge check
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
Go to the knowledge checkOptional course overview video · same video as Lesson 1
Debt Payoff
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