If you've never heard of "the snowball effect", you may have missed out on some choice snow days in St. Louis in winters past.
Essentially, the snowball effect is where something starts very small but, over time with persistence, becomes a much bigger force. This is something that you can actually use--alongside affordable and competitive bad- and no-credit car loans in St. Louis--to reduce your loan amounts owed and cut way down on debt.
The snowball effect as a debt-relief strategy was popularized by Dave Ramsey, and is a much simpler process than you might think! The way it works is like this:
- Find the smallest debt that you have
- Pay as much as possible toward that one debt while still making the minimum payments on your other loans/debts
- When the smallest debt/loan has been paid off, take that money and add it onto the minimum monthly payment for your second-smallest debt/loan (which, of course, is now your smallest debt)
- When that debt/loan has been paid off, take that larger sum of money and add it onto the minimum monthly payment for your now-smallest debt/loan
- Continue this process until your monthly payments have "snowballed" into one or two massive payments that you make on your remaining loans or debts
If you need a vehicle to help you get around town, and you can't pay in cash, you may need to take out a loan. However, with low financing rates and ultra-affordable loan offers on great used cars in St. Louis, you can get the reliable, quality car or truck that you need without putting any major obstacles in front of your snowball.
Categories:
Credit Tips
