Avalanche vs snowball: comparing debt payoff strategies

One method is mathematically cheaper. The other is psychologically easier. Here is how to see the actual gap for your debts.

When you owe money on several things at once, the order you clear them in changes what the whole exercise costs. Two strategies dominate the advice, and the argument between them is unusually heated for a question that is mostly arithmetic.

The two methods

Avalanche targets the highest interest rate first, regardless of balance. Since interest is what makes debt expensive, killing the most expensive debt first minimises total interest. It is the mathematically optimal order, always.

Snowball targets the smallest balance first, regardless of rate. It costs more in interest, sometimes considerably. Its defenders argue that clearing an entire debt early produces a motivational win that keeps people going — and a plan you stick to beats an optimal plan you abandon.

Both methods share the crucial mechanic: when a debt is cleared, its minimum payment doesn't disappear from your budget. It rolls into the next debt, so the amount attacking your balances grows every time one falls.

Step-by-step

1. Open the planner. Go to Calculators and choose "Debt Payoff".
2. List your debts — name, balance, rate and minimum payment for each. Add or remove rows as needed.
3. Enter the extra you can pay each month beyond the minimums. This is the engine of the whole plan.
4. Compare. You get debt-free dates and total interest for both strategies, plus the payoff order.

Reading the result honestly

• The extra payment matters more than the method. Doubling your extra amount changes the outcome far more dramatically than choosing between the two orders.
• Watch for a minimum that barely covers interest. The tool flags this. A card where the minimum is almost entirely interest will sit there for decades untouched.
• Consider consolidating high-rate debt — a balance transfer or lower-rate loan changes the arithmetic more than any payoff order can.
• Don't let the plan block the emergency fund. Clearing debt with no buffer often means borrowing again at the first surprise.

Frequently asked questions

Which should I actually choose?

Run both. If the interest difference is small, pick the one you will stick with — and for many people that is snowball. If it is large, the avalanche saving is real money.

Is my financial information stored?

No. Everything is computed in your browser, and nothing you type is transmitted or saved.

What if my rate is 0% on a promotional period?

Enter 0 and the simulation handles it. Bear in mind the rate will jump when the promotion ends, which the model can't know about.