Why Debt Snowflake Method May Be One of the Best Student Loan Repayment Options

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.


We’ve got your back! Student Loan Hero is a completely free website 100% focused on helping student loan borrowers get the answers they need. Read more

How do we make money? It’s actually pretty simple. If you choose to check out and become a customer of any of the loan providers featured on our site, we get compensated for sending you their way. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own!).

Bottom line: We’re here for you. So please learn all you can, email us with any questions, and feel free to visit or not visit any of the loan providers on our site. Read less

Student loan debt can be overwhelming, but you can tackle your balances with the smallest amounts of money. If you’re looking for a manageable way to start repaying your debts and you can set aside tiny chunks of cash each week, the debt snowflake method may be right for you.

This method of paying off student loan debt can be more budget-friendly and less overwhelming for cash-strapped recent college graduates. Debt snowflake involves directing small payments — even as little as $5 at a time — toward your student loans. This can lower your balances and perhaps even reduce your interest payments over time.

If you need help managing your student loan payments and can find ways to budget, this strategy could be a good fit. Here’s how to tell if the debt snowflake method can help you pay off student loan debt faster, and how to determine if this is the best student loan repayment option for you.

What is the debt snowflake method?
Debt snowball/avalanche vs. debt snowflake
How debt snowflake method works
Advantages of debt snowflake method
Disadvantages of debt snowflake method
Is the debt snowflake method right for you?

What is the debt snowflake method?

Debt snowflake is a strategy that focuses on paying off a debt in extremely small chunks of money on a regular schedule. They are sometimes called “snowflakes” or microsized debt payments.

This student loan repayment option can be somewhat easier on your budget. That’s because you can put down four $25 payments per month instead of a lump sum of $100 that needs to be paid on your loan balance. You can do this by finding savings in your daily life, like making coffee at home instead of buying a pricey latte at the coffee shop or saving loose change or dollar bills every week. Then take those small savings and put them toward paying off your student loans. (Though make sure any additional money you pay goes toward your principal and not your interest.)

Debt snowball/avalanche vs. debt snowflake

If you have student loans, you may have heard of the debt snowball and debt avalanche methods of loan repayment, which recommend throwing as much money toward one outstanding debt as possible.

The debt snowball plan often starts with the loan with the lowest balance, while the debt avalanche plan tackles the highest-rate loan first. With either approach, you’ll also pay the minimum amounts on any other debts or loans you have. After you pay off the targeted debt balance, you’ll tackle the next debt with all applicable funds and continue until you’re debt-free.

On the flip side, debt snowflaking takes a less-drastic approach. It combines very small amounts of money, or snowflakes, throughout the month that consistently reduce your balance. It can also save you a bit more money on interest payments over the long term by lowering your outstanding debt if you can pay more than the minimum required payments.

How debt snowflake method works

This student loan repayment option hones in on the idea that the slow and steady approach is the one that wins the race.

Debt snowflaking can help you feel like you’re progressing more quickly with your student loan repayment since your balance continues to tick down on a regular basis instead of just once a month. It can also promote better financial habits, as you’ll be more conscious of how and when you’re spending your cash and which expenses you can do without.

Debt snowflake can be a good method for paying down debt in the long term. That’s because it gives you both financial and psychological benefits.

Here’s a breakdown of how this debt payoff plan works:

Step 1

Make a list or compile a spreadsheet of all your student loans and other debts. Then, organize them from the lowest balance to the highest. You can also try out a student loan budgeting app.

You don’t have to worry about the interest rates because the debt snowflake method simply focuses on the balances owed.

Step 2

Find out what the minimum payment amount is for each debt. Then, put this on the list as well. Make sure you pay at least that amount every month.

You’ll likely split this payment up throughout the month. You can make either weekly or bimonthly payments. But for now, just record what the minimum payments are so you don’t incur fees for not paying the correct amount.

Step 3

Use specific income streams or saving strategies to pay down a specific student loan or credit card debt with the microsized payments.

For example, every time you go to the grocery store and use a coupon, or make a purchase online and use a discount code, or save money from not buying a cup of coffee, immediately set aside those savings to be allocated toward the debt balance on Loan 1.

Then, if you have a weekend job or make extra money with a side hustle, dedicate that income to pay for Loan 2. Afterward, put all your birthday money and other “found money” throughout the year to pay for Loan 3. And so on.

Step 4

Keep up the momentum. Continue snowflaking small payments toward your loans whenever you save money on a purchase or receive income from freelance work.

In addition, dedicate any extra money at the end of every week to a specific debt, even if it’s just an additional $5, $10 or $20, to help pay it down faster and save on interest in the long term.

Just make sure all of these amounts add up to at least your minimum payment due on that account every month, or you’ll risk being charged student loan interest and late fees.

Advantages of debt snowflake method

More budget-friendly debt payments

Since debt snowflaking is all about microsized debt payments, it’s a bit easier on your monthly budget. You don’t have to worry about coming up with a big amount all at once to make your monthly debt payments. Instead, you can focus on small amounts every week or every two weeks.

This is one of the best student loan repayment options for freelancers or anyone with an irregular income. It is also a good option for recent grads who want to start tackling their student loans without feeling overwhelmed, but don’t make a high enough salary to pay down big chunks of debt.

Avoid debt payoff fatigue

One of the great things about the debt snowflake method is that you’re less likely to experience debt fatigue.

You’ll be making small but consistent payments — and positive changes in your financial habits — throughout the course of paying off your debt. This makes the process seem a bit easier and doable.

When looking at a large amount of debt, you sometimes need a strategy that feels easily achievable rather than one that seems unmanageable.

Financial and psychological benefits

When you follow this micropayment plan, you can enjoy both financial and psychological benefits early on. Why? Because it speeds up your debt payment momentum while boosting your confidence with small, but consistent, wins.

You’re also taking more frequent action toward tackling your debt, thus creating more-conscious money and spending habits. As an added bonus, you’ll be better organized with your finances and well-positioned to make larger payments when you start to earn more money.

Disadvantages of debt snowflake method

Easy to underpay your balance

Since this method means making microsized payments toward your debt, even $15 or $25 each time, it’s easy to underpay the monthly minimum balance due on your loan.

If that happens, it can lead to underpayment charges and other penalties and fees. That’s why it’s important to list out the minimum balance for each account and divide that by the number of payments you feel you can easily make each month.

Lots of transactions to track

Debt snowflaking is one of the student loan repayment options that generates a lot more transactions and payments from your bank account toward different debt balances.

It’s a good idea to sign up for free online banking where you can set up regular automatic payments to your loans. This can eliminate the headache of having to keep all your payments organized, and from being overwhelmed with so many transactions.

May come up against limitations on number of payments

Before setting up multiple transactions to and from your checking account, check with your bank to see if there are any limitations on the number of transactions.

Some financial institutions and lenders cap the number of transactions or payments you can make every month. So if you’re setting up five to eight microsized payments every month, you may go over the bank’s limit and incur transaction fees, which could end up costing you money that you could instead put toward debt repayment.

Is the debt snowflake method right for you?

It’s important to weigh all the advantages and disadvantages of the debt snowflake method so you can use it to the fullest potential.

When choosing among various student loan repayment options, consider all the possibilities and review the pros and cons of each method. Take your time to fully understand them and then make the best-informed decision.

You might want to experiment with different methods until you find the one that works best for your situation. If micropayments sound appealing to your budget and your lifestyle, then debt snowflake may be just the method for you.

The information in this article is accurate as of the date of publishing. 

Alli Romano contributed to this report.

Interested in refinancing student loans?

Here are the top 8 lenders of 2019!
LenderVariable APREligible Degrees 
Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 13, 2019, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 12/13/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.46% APR (with AutoPay) to 7.61% APR (without AutoPay). Variable rates currently from 2.31% APR (with AutoPay) to 7.61% (without AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.31% APR assumes current 1 month LIBOR rate of 2.31% plus 0.75% margin minus 0.25% for AutoPay. If approved for a loan, the fixed or variable interest rate offered will depend on your credit history and the term of the loan and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

3 Important Disclosures for Figure.

Figure Disclosures

Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.

4 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.


There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.


For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
For eligible Associates degrees in the healthcare field (see Eligibility & Eligible Loans section below), Lender will refinance up to $50,000 in loans for non-ParentPlus refinance loans. Note, parents who are refinancing loans taken out on behalf of a child who has obtained an associates degrees in an eligible healthcare field are not subject to the $50,000 loan maximum, refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for more information about refinancing ParentPlus loans.


Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).

Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.

All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.

For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.


The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.


The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.


After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.

We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.

We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.

If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.


This information is current as of November 8, 2019 and is subject to change.

5 Important Disclosures for Splash Financial.

Splash Financial Disclosures

Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.

6 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.76% effective November 10, 2019.

7 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 12/07/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.

8 Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

1College Ave Refi Education loans are not currently available to residents of Maine.

2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.

4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 12/1/2019. Variable interest rates may increase after consummation.

1.99% – 6.89%1Undergrad
& Graduate

Visit Earnest

2.31% – 7.36%2Undergrad
& Graduate

Visit SoFi

1.99% – 6.75%3Undergrad
& Graduate

Visit Figure

1.99% – 6.65%4Undergrad
& Graduate

Visit Laurel Road

2.43% – 7.60%5Undergrad
& Graduate

Visit Splash

1.85% – 6.13%6Undergrad
& Graduate

Visit CommonBond

1.90% – 8.59%7Undergrad
& Graduate

Visit Lendkey

2.74% – 6.25%8Undergrad
& Graduate

Visit College Ave

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Credit & Debt, Student Loan Repayment

You're on your way...

You are being redirected to LendingTree.com where you’ll be able to fill out an online form. Based on your creditworthiness, you may be matched with up to five different personal loan lenders in our partner network.