Paying off debt — snowball or avalanche?

Q: How do I check my BKR status?

Free 1x per year: go to bkr.nl, click "Mijn Kredietoverzicht" and log in with DigiD. You immediately see: all active loans + any arrears + dates when A-codes expire. More than 1x/yr: costs €7.50 per request. Tip: do it early in the year before a mortgage application (banks ask for BKR proof, no nasty surprises). On registration errors: file an objection free at bkr.nl.

Q: How long does a debt stay on BKR?

Active loan: as long as it runs + up to 1 year after payoff (positive registration). Arrears (A-code): 5 years from the recovery moment, regardless of amount owed. Forgiveness/WSNP: also 5 yrs after track ends. Practical: if you have arrears in 2026 and pay in 2027, A-code remains visible until 2032. No workaround: paying doesn't speed up the timeline, only the recovery moment.

Q: Should I pay off mortgage first or other debts?

Almost always other debts first. Compare rates: mortgage 4% (effective ~2.5% after deduction), credit card 15-22%, personal loan 6-12%, DUO student debt 2.5%. With credit card 18% vs mortgage 4%: every €1,000 on credit card costs €140 more/yr than on mortgage. Exception: mortgage deduction expired (past max-deduction period) and mortgage >90% WOZ — then interest not deductible + high risk surcharge. DUO: lowest priority, income-based, long term.

Q: Does loan consolidation work?

Sometimes, often not. Works if: new rate significantly below old weighted average (e.g. 6% new vs 14% old avg) + same payoff term. Does NOT work if: lender extends term so monthly drops but TOTAL interest is more. Many consumer lenders do this. Check: calculate total interest over new loan's full term, compare with sum of old interest if you keep paying at current pace. Often existing situation wins. Good alternative: mortgage top-up to pay off expensive credit card (4% instead of 18%) — with home equity + stable income.

Multiple debts at once? Snowball (smallest first, motivation) vs avalanche (highest rate first, mathematically optimal). Computes which gets you debt-free faster and how much interest you save.

In short

With multiple debts at once there are two well-known strategies. Snowball method: pay off the debt with the smallest remaining balance first (regardless of rate), then the next. Advantage: quick "wins" give psychological boost — you see debts disappear one by one. Disadvantage: often higher total interest paid. Avalanche method: pay off the debt with the highest rate first, regardless of amount. Advantage: mathematically optimal — least total interest. Disadvantage: with large high-rate debt no completion momentum for a long time. Rule of thumb: rate spread > 5% (e.g. 4% mortgage + 12% credit card) — avalanche win is significant, pick avalanche. Comparable rates (all <6%) — snowball motivation more valuable. Example: three debts: €500 credit card 18% + €2,000 loan 8% + €5,000 student-DUO 2.5%. With €200/mo payoff room above minimum payments: snowball = 33 months, €1,180 total interest. Avalanche = 31 months, €760 total interest. Avalanche saves €420. Important: a debt counselor can often arrange debt forgiveness or WSNP voluntary track on force majeure (unemployment, divorce) — free via Municipality or Schuldhulpverlener. BKR registration stays 5 years after last payment delay — check your status free at bkr.nl.

How to read the result

Rate gap >5% — always choose avalanche
With credit card 18% next to mortgage 4%: the difference is so large that snowball psychology isn't worth the mathematical loss. Concrete: €1,000 on 18% credit card = €180/yr interest. Same €1,000 on 4% mortgage = €40/yr. Each month delaying credit card payoff costs you €15/mo. Conclusion: with >5% gap between debts — skip snowball, always avalanche.
BKR registration stays 5 years — even after payoff
Every loan €250+ to private individuals is registered with BKR. On payment delays you get an A-code (arrears) that stays 5 years after recovery. Even if you pay off everything — the flag stays. Consequence: mortgage application within those 5 years = rejection or much higher rate. Tip: check your BKR status once per year free at bkr.nl. On errors: objection possible.
Minimum payments + extra above the minimum
Every debt has a minimum monthly payment (credit card: usually 2% of balance, personal loan: fixed amount, DUO: income-based). Strategy: pay minimum on EVERYTHING, then add all your extra payoff capacity to ONE debt (chosen via snowball or avalanche). Don't spread — concentrating is faster. Example: €200 extra/mo all to credit card: gone in 12 mo. Spread across 3 debts: gone only in 18 mo, plus more interest.
Loan consolidation — only worth it on big rate savings
Lenders offer "consolidation loans" to bundle three debts into one new loan. When advantageous: new rate significantly below weighted average of old debts. Example: 3 debts avg 12% → new loan 6% = clear win. Often NOT worthwhile: lender extends term so monthly drops but TOTAL interest rises. Check: compare total interest over full new-loan term vs old debts at equal payoff time. Many consolidation loans extend debt AND raise total cost.
On force majeure: don't muddle through alone, get municipal help
On unemployment, divorce, illness — debts spiral fast. Important: municipal debt counseling is free, confidential, and no BKR penalty. First conversation usually within 2 weeks. They can: (1) Stop creditors from collection. (2) Set up amicable track where creditors accept partial payment. (3) On severity refer to WSNP (Debt Restructuring Act for Natural Persons) — 3 yrs minimum living + residual debt forgiven. Don't hesitate: earlier = more options.

Key terms

BKR: Bureau Krediet Registratie. Central register of all loans to private individuals in NL. Every loan >€250 listed. Arrears get an A-code visible for 5 years.
WSNP: Debt Restructuring Act for Natural Persons. Legal track of max 3 years where you live on minimum + all income above goes to creditors. After: residual debt forgiven. Admission via court.
Amicable track: Out-of-court settlement where a debt counselor mediates between you and creditors. They accept partial payment (often 30-50%) and stop collection. 3 yr duration. Alternative to WSNP.
Debt counseling: Free service from municipalities + NVVK members. Help with budget, debt overview, negotiating with creditors, referral to amicable or WSNP. No BKR impact from just requesting help.
A-code: BKR code for arrears. Follows payment delay >2-3 months. After recovery: remains visible 5 yrs as A1, A2, A3, or A4 (depending on debt type).
Snowball method: Payoff strategy paying off smallest debt first, then next. Psychological motivation via quick wins, but mathematically often more expensive than avalanche.
Avalanche method: Payoff strategy paying off highest-rate debt first, regardless of amount. Mathematically optimal = lowest total interest. Less motivating when starting with a large high-rate debt.
NVVK: Association for debt counseling + social banking. Trade body that monitors quality of municipal debt counselors. Differentiates recognized help from unreliable debt mediators.

Frequently asked

How do I check my BKR status?

Free 1x per year: go to bkr.nl, click "Mijn Kredietoverzicht" and log in with DigiD. You immediately see: all active loans + any arrears + dates when A-codes expire. More than 1x/yr: costs €7.50 per request. Tip: do it early in the year before a mortgage application (banks ask for BKR proof, no nasty surprises). On registration errors: file an objection free at bkr.nl.

How long does a debt stay on BKR?

Active loan: as long as it runs + up to 1 year after payoff (positive registration). Arrears (A-code): 5 years from the recovery moment, regardless of amount owed. Forgiveness/WSNP: also 5 yrs after track ends. Practical: if you have arrears in 2026 and pay in 2027, A-code remains visible until 2032. No workaround: paying doesn't speed up the timeline, only the recovery moment.

Should I pay off mortgage first or other debts?

Almost always other debts first. Compare rates: mortgage 4% (effective ~2.5% after deduction), credit card 15-22%, personal loan 6-12%, DUO student debt 2.5%. With credit card 18% vs mortgage 4%: every €1,000 on credit card costs €140 more/yr than on mortgage. Exception: mortgage deduction expired (past max-deduction period) and mortgage >90% WOZ — then interest not deductible + high risk surcharge. DUO: lowest priority, income-based, long term.

Does loan consolidation work?

Sometimes, often not. Works if: new rate significantly below old weighted average (e.g. 6% new vs 14% old avg) + same payoff term. Does NOT work if: lender extends term so monthly drops but TOTAL interest is more. Many consumer lenders do this. Check: calculate total interest over new loan's full term, compare with sum of old interest if you keep paying at current pace. Often existing situation wins. Good alternative: mortgage top-up to pay off expensive credit card (4% instead of 18%) — with home equity + stable income.

When do you go to WSNP?

WSNP (Debt Restructuring Act for Natural Persons) is for severely over-indebted situations. Conditions: (1) Unable to pay + no prospect within 5 years. (2) Good faith (no fraud, no irresponsible spending). (3) Amicable track tried first (and failed). Track: 3 yrs living on welfare level + all extra income to creditors. After: residual debt forgiven + clean slate. Practical: register via municipal debt counseling, they file the court application. Effect: yes BKR registration 5 yrs, but better outcome than endless struggling.

Complex situations

Edge cases that typical net-pay tools skip but actually matter for a real Dutch tax situation. Each one assumes the basic case above and tells you what changes.

Residual debt after home sale — what now

On forced sale (divorce, unemployment) where sale price < mortgage balance: residual debt. With NHG guarantee: NHG takes over residual in specific cases (unemployment, divorce, death, disability). No private debt left. Without NHG: residual remains your private debt, BKR A-code registration, 5 yrs. Options: (1) Payoff arrangement with bank (often max 10-15 yr term, low monthly). (2) NHG remediation scheme: forgiveness on "good faith" sale. (3) WSNP track if no prospect of payoff. Important: new mortgage application within 5 yrs of residual = nearly always rejection.

DUO + other debts — the order

DUO student debt has unique features: (1) Income-based payoff (max 4% of income above threshold). (2) Low rate (2026 ~2.5%). (3) Residual debt after 35 years = forgiven. (4) No BKR registration. (5) Counts in max-mortgage calculation. Conclusion: DUO has lowest priority for accelerated payoff. Don't add extra payments if you have credit card or consumer debt. Only consider when all other debts gone AND mortgage application is upcoming (DUO balance lowers max mortgage). Beware: students with DUO + credit card arrears → credit card first, then DUO.

BKR registration and mortgage application

Banks mandatory-check BKR on mortgage application. What they see: (1) Active loans (lower max mortgage). (2) A-codes active or historical up to 5 yrs back. Practical: (A) With current A-code: 95% rejection or much higher rate. (B) Historical A-code in 5-yr zone: lower acceptance, higher risk surcharge (0.5-1.5%). (C) Clean BKR: standard rates. Tactic: (1) Check your BKR 6+ months ahead. (2) On errors object immediately. (3) On old A-codes: wait for expiry before applying (can save thousands of euros on 30-yr interest). (4) When unsure: mortgage advisor who knows multiple banks — some accept historical A-codes more readily.

Personal guarantee for family/friend

Sometimes family/friend asks you to co-sign on a loan. What that means: your name as co-holder on the loan, BKR registration on YOUR name, arrears hit YOUR creditworthiness. On default by main person: bank can pursue you for the full residual. Almost never do this, except: (1) Spouse/registered partner (existing financial mingle). (2) Child on own home with low-risk top-up. For other family/friends: never. The law doesn't differentiate between "I'm helping out" and "I take full responsibility". On default you lose 10+ yrs BKR + get collection directly. Better: gift the money or lend yourself and carry the risk knowingly.

Self-employed bankruptcy — different regime

For IB-ondernemers (sole prop/ZZP): on bankruptcy not Wsnp but debt restructuring scheme for entrepreneurs (Wsnp business track). Differences: (1) Admission harder — not on "normal" business setback. (2) Duration 3-5 yrs. (3) Business + private debts treated together (BV holders only private part via Wsnp). For BV holders: BV bankrupt = end of the BV, your private wealth stays safe unless you have director liability (unpaid payroll tax, mismanagement, fraud) or signed personal guarantees for business loans. Practical advice: at impending bankruptcy, get legal advice immediately (KvK has free sparring hours). Waiting shrinks options; early action gives the most paths.

What this tool doesn't do

Estimates optimal strategy for multiple debts. Not suitable for: severely over-indebted situations (3+ debts > annual income) — go directly to municipal debt counseling (free, confidential). WSNP track requires legal guidance.

Data source

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