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Paying down your debt?

The first step to tackling debt is having an action plan that works for you. We have two proven options that could be the perfect plan for getting your finances on the right track. To help you choose, we’ve broken down the differences between the Snowball and Avalanche Methods:

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Avalanche Method

The Avalanche Method is paying off the balances with the highest interest rates first while paying minimum balances to other outstanding debts. By paying off high interest balances first, you will be lowering your overall debt amount.

Paying off your debt with the highest balance can be difficult, especially if you like to see results quickly. This option takes discipline and can challenging when money gets tight to stick to the payment plan. However, with discipline can come the peace of mind that your debt can be paid down faster.

Snowball Effect

The Snowball Method is paying off your smallest balance first and rolling the extra money into the next smallest payment, and so on. This method is effective for those who are motivated by seeing results quickly. When you see that you have one less bill coming or one less balance to pay off, that momentum will keep you on track to pay down the rest of your debt.

Paying off lower balances quickly can be great motivation and the Snowball Method is very easy to follow. In the long run, you are typically paying more interest and it can take you longer to pay down your debt. However, if money is tight, paying off smaller balances is a good way to start to the process.

How do you choose?

With two proven methods, how do you go about choosing which plan is best for you? Martha Reabold, a South State team member in Greenville, SC, suggests developing a relationship with your local banker and using his or her expertise to tackle your debt planning. A banker can demonstrate the different amount of interest you would be paying with each method and how your payments would look for each outstanding balance. Reabold explains, “Every situation is different, and our bankers can look at the whole picture in light of the customer’s long-term goals.”

Jensen Caudle, a South State banker from Charlotte, NC, says, “In either case, balancing what you can pay and how long you want to make the payments is important. This may be the first step in deciding what method to choose.”

Your situation is unique and talking through options to formulate a plan that balances what you can pay and your lifestyle is the first step to finding a debt solution that’s right for you.


Need help getting started? Use this template to help you outline your debts.

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Since 1934, we’ve remained true to our values of relationship banking and commitment to our customers. We’re proud to have grown from serving the needs of one small community to helping businesses and individuals throughout the region. We value personal relationships over financial transactions and are actively involved in the communities we serve. Most importantly, we treat our customers and employees like family. That’s the South State Way.

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