Smart Debt Repayment: Snowball vs. Avalanche Techniques - Malayalam | E219

𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐃𝐞𝐬𝐤𝐬:

𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐂𝐚𝐥𝐜𝐮𝐥𝐚𝐭𝐨𝐫𝐬:

𝐒𝐨𝐜𝐢𝐚𝐥 𝐌𝐞𝐝𝐢𝐚𝐬:-

- 𝐓𝐞𝐚𝐦 𝐃𝐢𝐚𝐳

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𝐂𝐡𝐚𝐩𝐭𝐞𝐫𝐬

00:00 Introduction
00:53 Debt Snowball
04:40 Debt Avalanche
07:58 Conclusion

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Debt Snowball:
The Debt Snowball method is a debt reduction strategy that focuses on paying off your debts in order of smallest to largest balance, regardless of interest rates. Here's how it works:
* List Your Debts: Make a list of all your debts, starting from the smallest balance to the largest.
* Minimum Payments: Continue making minimum payments on all debts except the smallest one.
* Extra Payments: Allocate any extra funds you can towards the smallest debt.
* Snowball Effect: Once the smallest debt is paid off, take the amount you were paying towards it (minimum payment + extra payment) and apply it to the next smallest debt.
* Repeat and Accelerate: Keep repeating this process as each debt is paid off, creating a "snowball effect" of freed-up funds that you can use to tackle larger debts.
*
Debt Avalanche:
The Debt Avalanche method focuses on paying off debts in order of highest interest rate to lowest interest rate. This approach minimizes the total interest paid over time. Here's how it works:
* List Your Debts: Create a list of all your debts, arranging them from the highest interest rate to the lowest.
* Minimum Payments: Make minimum payments on all debts except the one with the highest interest rate.
* Extra Payments: Allocate any additional funds towards the debt with the highest interest rate.
* Interest Savings: By prioritizing higher interest debts, you save more money on interest payments over time.
* Cascade Effect: Once the highest interest debt is paid off, apply the amount you were paying towards it (minimum payment + extra payment) to the debt with the next highest interest rate.
* Repeat and Accelerate: Continue this process as you pay off each debt, gradually moving down to lower interest rate debts.
Choosing Between the Methods:
* Debt Snowball: This method provides psychological motivation through quick wins as you pay off smaller debts first. It's great for those who need the emotional boost of progress.
* Debt Avalanche: This method is financially optimal as it reduces the total interest paid. It's suitable for those who are more focused on the numbers and are willing to forgo quick wins for long-term savings.
Ultimately, the choice between the Debt Snowball and Debt Avalanche depends on your personality, financial goals, and preferences. The most important aspect is to choose a method that you can stick to consistently, as commitment is key to successfully reducing your debt.

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[muhammedrashid]

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[anilnandanamanil]

സാർ എനിക്ക് 13 ലക്ഷത്തിന്റെ ഹൗസിംഗ് ലോൺ ഉണ്ട്... അഞ്ചുവർഷമായി.. നിലവിൽ കെഎസ്എഫ്ഇയിൽ 10 ലക്ഷത്തിന്റെ ഒരു ചിട്ടിക്ക് ചേർന്നിട്ടുണ്ട്... 12 അടവായി.. ഈ ചിട്ടിപ്പിടിച്ച് കുറച്ചു പൈസയും കരുതി ഈ ഹൗസിംഗ് ലോൺ അടച്ചു തീർക്കുന്നതല്ലേ നല്ലത്... വിലയേറിയ ഒരു ഉപദേശം തരണമെന്ന് അപേക്ഷിക്കുന്നു