Debt snowball vs avalanche: which pays off faster?
Both methods use the same monthly budget. They differ only in which debt gets the extra money first.
The two methods in one minute
Snowball: pay every minimum, then put all extra money on the smallest balance. When it is cleared, move its payment to the next smallest. Avalanche: same, but target the highest interest rate first.
A worked example
Five debts totalling $31,690, with $150 a month extra on top of the minimums ($595 in minimums, so a $745 monthly budget):
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Credit card A | $4,200 | 22.9% | $105 |
| Credit card B | $1,850 | 19.5% | $55 |
| Car loan | $9,800 | 6.9% | $245 |
| Student loan | $15,200 | 5.1% | $160 |
| Store card | $640 | 26% | $30 |
| Plan | Months to debt-free | Total interest |
|---|---|---|
| Minimums only | 122 | $10,558.85 |
| Snowball + $150 | 50 | $5,274.29 |
| Avalanche + $150 | 50 | $5,194.70 |
In this example both methods finish in 50 months and avalanche costs $79.59 less interest. Either way the extra $150 saves about $5,284.56 in interest and 72 months compared with paying only the minimums. The gap between the two methods is small here because the three smallest debts (the cards) are also the three highest-rate debts, so snowball already goes after the expensive ones first; only their order differs.
When each one wins
- Avalanche wins on cost whenever your highest-rate debt is not your smallest. The bigger the rate differences and the bigger the balances, the more it saves.
- Snowball wins on momentum. Clearing a small debt quickly removes a bill and a payment from your life, and many people find that makes them more likely to keep going.
- Both beat minimums-only by a wide margin, and both need the freed-up minimums to roll into the next debt.
How to choose
Put your debts into the free calculator and compare the two lines. If avalanche saves a meaningful amount, use it. If the difference is small, pick the method you will actually follow every month.
Debt Snowball & Avalanche Payoff Planner (Excel)
Want to keep your plan in a spreadsheet and update it as balances change? Enter up to 10 debts, pick snowball or avalanche, and see your debt-free month, total interest and a month-by-month schedule. Built with functions Excel, LibreOffice and Google Sheets all support.
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These figures come from the same calculation as the calculator and the planner above; real lenders may compute daily interest or round slightly differently. This is general information, not financial advice.