Debt Snowball vs Avalanche: Which Pays Off Debt Faster?
In this guide
Debt snowball and debt avalanche are two well-known ways to decide which debt gets your extra money first. Both pay every minimum on time. The only difference is the order: snowball goes after the smallest balance, avalanche goes after the highest interest rate. This post runs both methods on the same three debts, month by month, so you can see the real gap in interest and time.
Paying off debt is one line in a bigger plan. If you don't have a budget yet, how to make a monthly budget shows how to find the extra money in the first place.
Snowball vs avalanche in one table
| Debt snowball | Debt avalanche | |
|---|---|---|
| Which debt first | Smallest balance | Highest interest rate (APR) |
| Minimum payments | On every debt, every month | On every debt, every month |
| Where the extra goes | To the smallest balance | To the highest rate |
| When a debt is paid off | Its payment rolls to the next smallest | Its payment rolls to the next highest rate |
| Total interest | Same or more | Same or less |
| First paid-off account | Usually sooner | Sometimes much later |
The Consumer Financial Protection Bureau describes the same pair as the highest interest rate method and the snowball method, and its advice is to choose the one that fits your situation.
How the debt snowball works
- List every debt from the smallest balance to the largest. Ignore the interest rates for now.
- Pay the minimum on every debt.
- Put every extra dollar you can find on the smallest one.
- When it's paid off, add its old minimum to your extra and send all of it to the next smallest.
The payment grows each time a debt disappears, which is where the name comes from. Your total monthly payment stays the same. What changes is how much of it attacks the target.
The reason people like it is psychological. A research team at Northwestern's Kellogg School of Management studied nearly 6,000 clients of a debt settlement firm and found that the number of accounts closed predicted finishing the program better than the dollar amount paid off. The authors also note that dollars still matter and that the two measures are hard to separate, so read it as a point in snowball's favor, not proof.
How the debt avalanche works
- List every debt from the highest APR to the lowest. Ignore the balances for now.
- Pay the minimum on every debt.
- Put every extra dollar on the debt with the highest rate.
- When it's paid off, roll its payment to the next highest rate.
The math favors avalanche because the most expensive dollar of debt is always the one being paid down. The cost is patience. If your highest-rate debt is also a big one, months can pass before any account reaches zero.
Same debts, both methods
Here's a made-up example with three debts and $600 a month to pay toward them. The minimums add up to $350, so $250 a month is extra.
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Personal loan | $1,500 | 9.00% | $50 |
| Card A | $4,000 | 27.99% | $110 |
| Card B | $7,500 | 21.99% | $190 |
| Total | $13,000 | $350 |
Snowball attacks the personal loan first because it's the smallest. Avalanche attacks Card A first because it has the highest rate. Each month, both get the same $600.
| Result | Snowball | Avalanche |
|---|---|---|
| Order | Personal loan, Card A, Card B | Card A, Card B, Personal loan |
| First debt paid off | Month 6 (personal loan) | Month 14 (Card A) |
| Second debt paid off | Month 17 (Card A) | Month 28 (personal loan and Card B) |
| Debt-free | Month 29 | Month 28 |
| Total interest paid | $3,968.58 | $3,550.73 |
Avalanche saves $417.85 and finishes one month earlier. Snowball closes the first account eight months sooner. Neither result is wrong. They answer different questions.
For comparison, paying only $350 a month (the minimums, with each freed-up minimum rolled to the next debt) takes 66 months and costs $10,077.67 in interest with the snowball order. In this example, the extra $250 a month matters far more than the order you choose.
How the example was calculated: each month, interest is added to each balance at its APR divided by 12 and rounded to the cent, then the minimums are paid, then whatever is left of the $600 goes to the target debt. Real cards charge interest daily and minimums often shrink as balances fall, so your statements will differ a little. The comparison between the two methods holds.
Which one should you pick
If you'd keep paying either way, pick avalanche. It's the cheaper path whenever your smallest debt isn't also your most expensive. If you've started payoff plans before and dropped them, snowball's early win may be worth the extra interest.
If seeing debts disappear keeps you going
Choose snowball, especially if you have one or two small balances you could clear in a few months. Each closed account is one less due date and one less minimum to track. In the example, that first win came at month 6 instead of month 14.
If your highest rate is much higher than the rest
Choose avalanche. The bigger the gap between your rates, the more snowball costs you. A 28% card next to a 9% loan is a big gap. If all your debts sit within a few points of each other, the two methods land close together and you can choose on motivation alone.
You can also mix them. Clear one small balance first for the momentum, then switch to avalanche for the rest. Your minimums and your total payment don't change when you switch.
Run your own numbers
An interactive calculator isn't on this page yet. Until then, a spreadsheet does the same job with one row per month:
- Make one column per debt and type the starting balances in row 2.
- In the next row, add interest: the balance times the APR divided by 12. A 21.99% card with a $7,500 balance adds about $137.44 in the first month.
- Subtract the minimum from every debt.
- Subtract the extra money from the target debt only. When a balance hits zero, send its minimum and the extra to the next debt in your order.
- Copy the row down until every balance is zero. Count the rows for the months, and add up the interest column for the cost.
Run it once with the snowball order and once with the avalanche order, and compare the last row of each.
Track it every month
Whichever method you pick, the plan only works if the extra payment actually goes out every month. Put your payment date in the same place you track bills, and update each balance from your statements once a month.
The debt payoff planner app costs out both orders with your own numbers, smallest balance first or highest rate first, each with its finish month and total interest. You can add an extra amount each month with a plus button and watch your debt-free month move closer. Each debt shows its rate, its minimum and the month it should be cleared. You pay once, with no account and no bank login.
If you'd rather keep debt inside a full-year spreadsheet, the Ultimate Budget Planner has a Debt Killer tab with avalanche, snowball or your own order, and each paid-off payment moves to the next debt. More options are on the budget templates page.
This post is general information, not financial or credit advice. See the disclaimer.
Frequently asked questions
Is snowball or avalanche better?
Avalanche costs less interest whenever your highest-rate debt is not also your smallest. Snowball gives you a paid-off account sooner, which helps some people keep going. In the example in this post, avalanche saved $417.85 and one month, and snowball closed the first debt eight months earlier. Pick the one you will follow every month.
Can I switch methods halfway?
Yes. Both methods pay every minimum and send the extra money to one target debt, so switching only changes which debt gets the extra from now on. Nothing you already paid is lost. You can start with snowball to close one small balance, then switch to avalanche for the rest.
Should I stop saving to pay off debt?
A common approach is to keep a small emergency fund while you pay off debt, so a car repair or a medical bill does not go straight back on a credit card. How big that fund should be depends on your job, your bills and your interest rates. This post is general information, not financial advice.
Does paying off a card hurt my credit score?
Paying down a card generally does not hurt. The Consumer Financial Protection Bureau says that paying off your credit card balance every month is one of the factors that can help improve your scores, and that scores look at the balance you owe compared with your available credit.