There are several different paths you can take to rapidly repay your debt, but the debt snowball method is perhaps the most popular. But, what is the debt snowball method? Promoted by finance guru Dave Ramsey, this tactic involves paying off your smallest loan (in terms of principle) first while still making the minimum monthly payment on all other loans. The idea is that you gain momentum as you pay off your smaller loans, allocating the money that was going toward your smallest loan into the next smallest balance and so on and so on

To get the ball rolling, you’ll want to first list your debts from smallest to largest. With the extra money you have to repay your debt, you’ll want to allocate a portion to go toward your minimum monthly payments and the rest to go towards your smallest loan. Continue this until you’ve paid off your smallest loan and can move onto the second smallest. For example, if you have a loan with a $2,000 principle and 4% interest rate and another that’s $3,000 with a 6% interest rate, you would start putting your money towards the smaller loan first, despite the lower interest rate. If you have auto payments set up, you’ll want to go in and adjust your payments accordingly. You’ll also want to calculate the amount you can put toward loan repayments with monthly living expenses in mind (ie: rent, food, transportation, etc.). Your debt snowball should include all non-mortgage debt, including payday loans, student loans, medical bills, car notes, credit card balances, home equity loans, and personal loans. Note: Many advise that you have a $1,000 emergency fund set up before you start this process.

The major drawback to a debt snowball over a debt avalanche is that you aren’t paying off your loans with the highest interest rate/APR first. Because of this, you can end up paying more in the long run. On the flip side, you’re rewarded with early successes that encourage you to continue in your debt repayment endeavor.

Think of it this way–a debt snowball is more focused on behavior modification than math. With multiple wins piling up on top of each other, you don’t run out of steam. You can use a debt snowball calculator to see how long it would take you to pay off your debt with this method.

Short answer–Yes! According to a 2012 study by Northwestern’s School of Management, “consumers who tackle small balances first are more likely to eliminate their overall debt” than trying to pay off high-interest rate balances first–the Debt Avalanche. On the flip-side, you’ll have more interest to pay off in the long run.

In some instances, it makes sense to take out a personal loan to help pay off your debt snowball. If you can take out a personal loan with a very low interest rate, you can use these funds to pay off your smallest loan. Personal loan rates vary though, so make sure you’re getting the biggest bang for your buck.

You can apply for a personal loan today with Helix to see what rates and amounts you qualify for.