Paying Down Debt Infographic
Many Canadians live with debt, whether from credit cards, student loans or auto financing. The Paying Down Debt infographic illustrates how paying off debt or minimizing credit balances can be approached in different ways.
Snowball Approach to Debt
This approach directs that you make the minimum payments on all your debt, while also putting as much as possible toward the smallest balance each month. Once the smallest balance is paid off, repeat the process with the next smallest debt balance.
Avalanche Approach to Debt
This approach suggests that you make the minimum payments on all debt, while also putting as much as possible toward the balance with the highest interest rate. Once that balance is paid off, start paying more on the next highest interest rate debt.
The Paying Down Debt infographic illustrates both approach and why they are effective. In addition, discover how consolidation loans work and why they can be helpful. The infographic also suggests some best practices. Choosing the right strategy will depend on the amount of debt, as well as what it takes to stay motivated. It’s important to stay focused to achieve your debt payoff goals.
FreshPlan also includes companion calculators regarding mortgage and debt.
- Mortgage Affordability
- Debt Consolidation
- Loan and Debt Payment calculator
- Loan Calculator