The Debt Snowball and its Limitation
Like everything else on earth, this technique also has some limitations. These limitations should be carefully examined before applying it on your own. Even though the procedure is demonstrated to be one of the greatest techniques for debt repayment, there can be other variables beyond the scope of this version, and this guide may influence adversely its own application, reducing the economies, or perhaps at times costing more.
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The primary limitation is that the procedure does not consist of interest rates in its own decision. If we are talking about savings but ignoring the rate of interest, we are potentially losing out on additional savings that we could be earning. By way of example, if you have two similar sized loans with different rates of interest, it can be worth it to think about tweaking the strategy a bit to clear the marginally higher amount higher interest rate loan rather than focusing only on the amount.
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