Comparisons Finance

Debt Avalanche vs Debt Snowball

The avalanche pays the highest interest rate first and costs the least; the snowball pays the smallest balance first and wins on momentum. A worked example with real numbers.

Last reviewed:

AdSense Placeholder
Slot: header_reference_page
On this page

The avalanche method pays every debt's minimum and sends all extra money to the debt with the highest interest rate, which minimises total interest. The snowball method sends it to the smallest balance first, which closes accounts sooner and builds momentum. If you are disciplined, choose the avalanche; if you need quick wins to keep going, the snowball is a reasonable price to pay.

At a glance

Avalanche Snowball
Order of attack Highest APR first Smallest balance first
Total interest Lowest possible Higher (unless the smallest debt also has the highest rate)
First debt cleared Later Sooner
Strength Mathematically optimal Motivating
Weakness Slow first win if the top-rate debt is big Costs more if rates differ a lot

A worked example

Three debts, with 300 a month of extra money on top of the minimums:

Debt Balance APR Minimum
Card A 3,000 24.99 % 90
Card B 6,000 15.00 % 150
Loan C 1,200 8.00 % 60

Simulating monthly interest and rolling each paid-off minimum into the next target gives:

Avalanche Snowball
Debt-free after 20 months 20 months
Total interest 1,395 1,541
First debt cleared month 9 month 4

The avalanche saves about 146 in interest. Enter the same debts into the Debt Payoff Calculator and switch between the two strategies to compare your own numbers; results shift with your rates, balances and extra payment.

Which should you choose?

  • Rates differ a lot (for example 25% against 8%): avalanche, because the savings are real.
  • Rates are similar: snowball costs little extra and gives faster wins.
  • You have given up on plans before: snowball, or a hybrid that clears one very small debt first and then switches to avalanche.
  • Consolidating: compare a consolidation loan's rate to the highest rate you are paying before moving balances.

See How Debt Payoff Strategies Work for the full explanation, and Debt avalanche and Debt snowball for short definitions.

Try these tools

Debt Payoff Calculator

Simulate paying off multiple debts at once with the snowball (smallest balance first) or avalanche (highest interest first) strategy.

Debt Consolidation Calculator

Compare paying off several existing debts separately against rolling them into a single consolidation loan.

Credit Card Calculator

Find out how long it will take to pay off your credit card balance, how much interest you'll pay.

See also

  • Guide How Debt Payoff Strategies Work
    Avalanche versus snowball on one worked example with real totals, why minimum payments take so long.
  • Glossary Debt avalanche
    The debt avalanche is a payoff strategy that puts all extra money on the debt with the highest interest rate first.
  • Glossary Debt snowball
    The debt snowball is a payoff strategy that puts extra money on the smallest balance first, for quick wins.
  • Glossary APR
    APR (annual percentage rate) is the yearly cost of borrowing, expressed as a percentage, that includes the interest rate plus certain fees.

Frequently Asked Questions

The avalanche, always, because it directs extra payments to the debt that charges the most interest. The gap is often modest, and it depends on how far apart your interest rates are.

Closing accounts early is motivating, and people who stick with a plan beat people who abandon a better one. If small wins keep you paying, the extra interest can be worth it.

Yes. Both assume you keep the same total monthly payment, and that each paid-off debt's minimum rolls into the next target.

Back to the comparisons
AdSense Placeholder
Slot: footer_leaderboard