There are several strategies to avoid the debt snowball effect due to balloon payments. First, it's crucial to understand the terms of your loan agreement, especially the implications of a balloon payment. Second, budgeting and saving for the balloon payment can help manage the debt. Third, refinancing the loan before the balloon payment is due can spread the cost over a longer period. Fourth, making extra payments towards the principal can reduce the balloon payment. Lastly, maintaining a good credit score can provide more options for handling the balloon payment.
Do you struggle with loan payment and management? Our Ultimate Loan Tools (part 2), available in Mic...
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