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BASICS OFTHE DEBT
ROLL-DOWN
STRATEGY
Robert M Ryerson
Introduction
• For more than two decades, Certified Financial Planner Robert M.
Ryerson has advised clients at New Century Planning in New Jersey.
As a financial strategist forThe Society for FinancialAwareness,
Robert M. Ryerson also teaches financial literacy courses.
The Society for FinancialAwareness offer workshops on dozens of
important personal finance topics, including the debt roll-down.
The debt roll-down is designed to help people with large debts
from multiple lenders accelerate their payback rate while reducing
the amount of interest they pay.
The initial step of the debt roll-down is to create a spreadsheet of
all debts along with their interest rates and minimum payment
amounts. Debtors can start the roll-down with the smallest loan
amount or the highest interest rate.
Debt-Roll
• For example, a couple may have four major debts: a $500 credit
card debt, an $8500 car note, a $12,000 student loan, and a
$150,000 mortgage. Since the credit card bill is the smallest, the
couple can use any extra money from their budget to pay off the
credit card debt as soon as possible while paying the minimum on
the other debts.
Once the credit card is paid off, the couple can roll the minimum
payment from the credit card bill onto the next smallest debt, the
car note. Eventually, all of the smaller debts will be paid in full, and
the couple will put the sum of all the minimum payments toward
their mortgage, significantly reducing the amount of interest they
will pay over time.

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Basics of the Debt Roll-Down Strategy

  • 2. Introduction • For more than two decades, Certified Financial Planner Robert M. Ryerson has advised clients at New Century Planning in New Jersey. As a financial strategist forThe Society for FinancialAwareness, Robert M. Ryerson also teaches financial literacy courses. The Society for FinancialAwareness offer workshops on dozens of important personal finance topics, including the debt roll-down. The debt roll-down is designed to help people with large debts from multiple lenders accelerate their payback rate while reducing the amount of interest they pay. The initial step of the debt roll-down is to create a spreadsheet of all debts along with their interest rates and minimum payment amounts. Debtors can start the roll-down with the smallest loan amount or the highest interest rate.
  • 3. Debt-Roll • For example, a couple may have four major debts: a $500 credit card debt, an $8500 car note, a $12,000 student loan, and a $150,000 mortgage. Since the credit card bill is the smallest, the couple can use any extra money from their budget to pay off the credit card debt as soon as possible while paying the minimum on the other debts. Once the credit card is paid off, the couple can roll the minimum payment from the credit card bill onto the next smallest debt, the car note. Eventually, all of the smaller debts will be paid in full, and the couple will put the sum of all the minimum payments toward their mortgage, significantly reducing the amount of interest they will pay over time.