Enter up to 3 debts and see which payoff strategy saves you the most money.
Avalanche vs Snowball: Which is Right for You?
Both strategies use the same core mechanic: pay minimums on all debts, then direct all extra money at one target debt. The difference is which debt you target first.
Debt Avalanche — The Mathematician's Choice
Target the highest interest rate debt first. This minimises total interest paid and pays off debt in the least total time. If you have a credit card at 20% and a personal loan at 10%, avalanche attacks the credit card first.
Debt Snowball — The Psychologist's Choice
Target the smallest balance first, regardless of interest rate. The quick win of eliminating a debt entirely is motivating. Research by behavioural economists suggests many people are more likely to stay on track with snowball — meaning the "worse" strategy on paper can produce better real-world outcomes.
The Verdict
If the interest saving difference is large (thousands of dollars), avalanche is clearly worth the discipline. If the difference is small, pick snowball for the motivation boost. Either way, the most important thing is committing to a strategy and sticking with it.
Frequently Asked Questions
What is the debt avalanche method?
The debt avalanche method prioritises paying off the debt with the highest interest rate first while making minimum payments on all others. Once the highest-rate debt is gone, you roll that payment onto the next highest. This method minimises total interest paid and is mathematically optimal.
What is the debt snowball method?
The debt snowball method prioritises paying off the smallest balance first regardless of interest rate. Quick wins build momentum and motivation. Once a debt is cleared, its payment rolls onto the next smallest balance. This method typically costs more in interest but can be more motivating to stick with.
Which method is better — avalanche or snowball?
Mathematically, avalanche always wins — it minimises interest. However, research shows many people are more successful with snowball because quick wins keep them motivated. The best method is whichever one you will actually stick to.
What is an extra monthly payment?
The extra monthly payment is any amount above your total minimum payments that you can dedicate to debt repayment. Even $100–$200 extra per month significantly accelerates both strategies and reduces total interest paid substantially.
Should I consolidate my debts instead?
Debt consolidation (combining multiple debts into one lower-rate loan) can save significant interest. However, it only works if you don't rack up new debt on the cleared cards. Use this calculator to quantify your current interest cost, then compare it to consolidation loan rates.