Debt Snowball
💡 In plain English: Pay off your smallest debt first for a psychological win — then use that momentum on bigger debts.
Definition
A debt repayment strategy where you pay off the smallest balance first, regardless of interest rate, to build psychological momentum.
📌 Real-World Example
Debts: ₹15,000 credit card, ₹1.2L car loan, ₹8L personal loan. Snowball: clear ₹15,000 credit card first (fast win!), then attack car loan. Costs more in interest but keeps you motivated.
Related Terms
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