Chapter 3 of 5
The Avalanche Decision
Debbie just got a $4,200 tax refund. She's torn: pay down the highest-rate loan, split it across all loans, or start a proper emergency fund. The math is clear — but the psychology isn't.
Key Insight
Putting the full $4,200 on her 7.8% loan saves $1,840 in interest and cuts 8 months off her payoff timeline.
Model This Scenario