Snowball vs. avalanche: a complete comparison
The debt snowball targets the smallest balance first regardless of interest rate. You pay minimums on everything else and throw all extra money at the smallest debt. When it's gone, you roll that payment into the next smallest — creating a growing "snowball" of payment power.
The debt avalanche targets the highest interest rate first. Mathematically, this always minimizes the total interest paid. But it can take longer to clear your first debt, which some people find discouraging.
Frequently asked questions
What is the debt snowball method?
The debt snowball pays off your smallest balance first, regardless of interest rate. When that debt is gone, you roll its payment into the next smallest. This creates quick wins that keep you motivated.
What is the debt avalanche method?
The debt avalanche pays your highest interest rate first, minimizing total interest paid. Mathematically it always saves more money than the snowball, but it may take longer to clear your first debt.
Which debt payoff method is better?
Neither is universally better — the best method is the one you will actually stick with. Research shows early wins from the snowball keep many people on track. The avalanche saves more money but requires more patience.
How much money does the debt avalanche save?
The savings depend on your specific debts. For debts with very different interest rates (e.g., 22% credit card vs. 6% car loan), the avalanche can save hundreds or even thousands of dollars over the snowball.