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Payment Tips for Freezing Your Loan Pile-up: Snowball, Avalanche, & More!


Payment Tips for Freezing Your Loan Pile-up: Snowball, Avalanche, & More!

From auto to student to personal, most of us will acquire a variety of loans throughout our lives. Although all loans serve a common purpose, each is unique to a borrower’s circumstances, and requires a different repayment approach. Below are a few tips on how to make a personalized loan repayment plan specific to your particular needs.


Depending on the loan amounts and types, you’ll have different priorities for repayment. For instance, mortgage or student loans typically have longer payment timelines than personal or car loans. Additionally, personal loans might have a higher Annual Percentage Rate (APR) than other loans. Once you’ve evaluated your loans, you can figure out the best payment method for you.

Prioritizing Lowest Balance— Known as the snowball method, this strategy is all about building momentum. You’ll pay more towards your smallest loan while continuing to make minimum payments on the rest of your loans. Then, after you’ve paid off your first loan, you’ll move on to the next smallest, applying the extra cash flow to the new one. Once you’ve tackled a few loans, you’ll be making significant payments towards you bigger loans.

Prioritizing By APR— Similar to the snowball method, this technique involves you paying more towards a particular loan. However, instead of paying more towards your smallest loan, you’ll put more money towards the loan with the highest interest rate. This strategy, also known as the avalanche method, allows you to save more money over time because you are paying off the loans with the highest interest rate first.

Rounding Up—If you decide not to target a specific loan, you can still speed up your loan repayment process. Rounding up is an easy way to make a dent in all your loans. Rounding up to the nearest $5, $10, or even $50 will seem small, but will make a big difference in the long run!

Making Extra Payments—If your budget varies from month to month, you can save up to make one or two extra payments each year.

Consider Refinancing—There is also the option to refinance existing loans in order to get a lower interest rate and a reduced payment amount. If you are considering refinancing, Valley offers competitively low rates for auto loans, home mortgage loans, and personal loans.


Once you have a better idea of your repayment plan, you’ll need to figure out an appropriate budget to accommodate your loan payments. It’s important to keep your budget realistic and obtainable, leaving money for other necessary expenses and savings. And remember— every little bit helps! You don’t have to make enormous payments to make a difference in your loans.


Automate your payments to make sure you never miss a payment deadline. An automated process ensures you’ll always pay your minimum payments on time and avoid additional interest. Set up online payments with Valley’s online and mobile banking!

Overall, there are variety of ways you can pay off your loans. Regardless of the strategy you chose, the most important thing is to find a plan that works for YOU. Personalizing your payment plan will help you save money and make progress towards a debt-free life.

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