Managing Debt — Practice Questions

Managing DebtCredit and Borrowing — Strategies to pay down debt and keep it under control.Debt is manageable with a plan. The two classic payoff strategies trade speed against motivation.

Avalanche: pay extra on the highest rate debt first. Saves the most money.

Snowball: pay off the smallest balance first. Builds momentum.

Debt to income ratio (DTI): Your monthly debt payments divided by your monthly income. Lenders use it to judge how much more you can borrow.Automatic payments protect you from missed due dates, and paying more than the minimum shrinks the balance far faster.Capturing a full employer retirement match usually comes before overpaying low interest debt, since the match is an instant guaranteed return.11 practice questions with explanations. Free, and no account is needed to start.