The avalanche pays off faster and costs less interest. The snowball gets you your first win sooner. In the example below, the gap between them is two months and about $750, and which one is right for you depends on how big that gap is for your own debts.
Short on time? Put your own numbers into the debt payoff calculator and see both methods side by side.
How both methods work
They share the same engine. You pay the minimum on every debt, then send every spare dollar to one target debt. When that debt is gone, you roll its whole payment onto the next one. Your payment on the target keeps growing, which is where the "snowball" name comes from.
The only choice is the order of the targets.
- Snowball: smallest balance first, whatever the interest rate.
- Avalanche: highest interest rate first, whatever the balance.
A worked example with three debts
Say you owe this, and you can pay $150 a month on top of the minimums:
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Credit card | $6,000 | 27% | $180 |
| Personal loan | $3,500 | 11% | $90 |
| Store card | $900 | 15% | $35 |
That's $305 in minimums plus $150, so $455 a month goes to debt in total, and it stays at $455 until everything is paid. Here's what each method does with it.
| Snowball | Avalanche | |
|---|---|---|
| Target order | Store card, loan, credit card | Credit card, store card, loan |
| First debt cleared | Month 6 | Month 24 |
| Debt-free in | 31 months | 29 months |
| Total interest | $3,406 | $2,652 |
The avalanche finishes two months earlier and saves $754 in interest. That's real money, and it comes from one thing: the 27% card stops growing sooner, because every extra dollar hits it from month one.
Now look at the other row. With the snowball you close an account in month 6. With the avalanche your first debt disappears in month 24, which is two years of paying with nothing crossed off. If you're the kind of person who needs to see a balance hit zero, that's a long stretch to get through.
For comparison, paying only the minimums on the same three debts takes 54 months and costs about $5,900 in interest. Either method beats that by a wide margin. The $150 extra does most of the work, and the target order only decides the last $754.
Why the gap changes from person to person
The size of the gap depends on how far apart your interest rates are, and on whether your biggest balance is also your most expensive one.
- If your highest rate sits on your largest balance, like the 27% card above, the avalanche saves the most and its first win is the slowest.
- If your small balances carry the high rates, both methods pick nearly the same order and the gap shrinks to almost nothing.
- If all your rates are within a couple of points of each other, the interest difference is small. Take whichever feels better.
It also moves with the size of your extra payment. Pay a lot extra and you clear everything quickly, so there's less time for interest to pile up and the methods land close together. Pay a little extra and the order matters for much longer.
So which one should you pick?
Pick the avalanche if the interest gap is big, like $750 on a three-year plan, and you can stay motivated without early wins. Pick the snowball if you've started and quit a payoff plan before, or if you need small victories to keep going.
A plan you drop after four months saves nothing. A $754 difference only matters if you're still paying in month 29.
There's also a middle path. Start with the snowball on a tiny balance to get one quick win, then switch to the avalanche order for everything else. It's not a textbook method, but it costs little and it keeps a lot of people going. The calculator will show you what that costs in your case if you run the numbers both ways.
Things the example leaves out
The numbers assume fixed rates, no new charges and the same $455 paid every month. Real life is messier. Cards have promotional rates that expire, a missed payment adds fees, and a new purchase on a card you're paying down undoes your progress. Treat any payoff date as a good estimate and recheck it every few months.
Two checks are worth doing before you start. First, make sure the minimums you entered match your latest statements. Second, keep a small buffer, even $300, so a surprise bill doesn't land on the card you're paying off.
One more thing that trips people up is the minimum payment on a cleared debt. When the store card is gone, don't spend its $35. Add it to the next target, because that's the whole mechanism. If the payment quietly disappears into everyday spending, you've turned a $455 plan into a $420 one, and the dates above stop being true.
Run it on your own debts
The debt payoff calculator takes your balances, rates and minimums, adds your extra payment and shows the payoff date and total interest for both methods. It runs in your browser and nothing you type is sent anywhere.
Once you have a plan, the hard part is sticking to it. Kapitech is an iOS app that tracks your expenses and budget and keeps your debts in one place, so you can see whether you're actually finding the extra money each month. Your data stays on your device. You can take a look at it on the App Store.