Debt Snowball vs Avalanche: Which Payoff Order Wins?
The maths favours one method, human behaviour favours the other. Here is how to choose — and how to model both.
The two methods
Avalanche pays the highest interest rate first. It costs the least in total interest.
Snowball pays the smallest balance first. It clears accounts fastest, which feels better and keeps people going.
What the numbers usually say
For most households the total difference is smaller than expected — often a few hundred dollars over several years, unless one debt carries a dramatically higher rate. If you have a 24% credit card and a 4% car loan, avalanche is clearly worth it. If everything sits between 15% and 20%, pick whichever you will actually stick to.
How to run either one
- List every debt: balance, rate, minimum payment.
- Pay the minimum on all of them, always.
- Send every spare dollar to the target debt.
- When it clears, roll that whole payment to the next one. This rolling payment is what makes the plan accelerate.
Do not skip these
- Keep a small emergency buffer while paying off debt, or the next surprise goes back on the card.
- Watch for balances that grow: if the minimum payment is smaller than the monthly interest, the debt is going backwards and needs attention first.
- Model an extra payment before you commit. Even $50 a month can cut months off the plan.
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