Snowball vs Avalanche
Two strategies, one goal: becoming debt-free. One saves you the most money, the other keeps you motivated. Here's how they compare and which one to pick.
The Two Approaches
Both strategies share the same foundation: pay the minimum on every debt, then throw all your extra money at one specific debt. Once that debt is gone, you roll its payment into the next target. This "rolling payment" effect is what makes both methods powerful.
The only difference? Which debt you target first.
Avalanche
Target the highest interest rate first
Snowball
Target the smallest balance first
The Avalanche Method
Pay off debts in order of highest interest rate to lowest. This is mathematically optimal because you eliminate the most expensive debt first, saving the maximum amount of interest over time.
Example: Avalanche Order
Credit Card
$8,500 at 22.9%
Personal Loan
$3,200 at 11.5%
Car Loan
$12,000 at 6.5%
Pros
- Saves the most money in total interest
- Mathematically optimal strategy
- Faster debt-free date in most cases
Cons
- Highest-rate debt may also be the largest
- Could take months before first debt is eliminated
- Progress can feel slow early on
The Snowball Method
Pay off debts in order of smallest balance to largest. Popularized by Dave Ramsey, this method prioritizes psychological wins. You eliminate entire debts quickly, building momentum and confidence to tackle the bigger ones.
Example: Snowball Order
Personal Loan
$3,200 at 11.5%
Credit Card
$8,500 at 22.9%
Car Loan
$12,000 at 6.5%
Pros
- Quick wins keep you motivated
- Fewer debts to manage sooner
- Backed by behavioral research
Cons
- Costs more in total interest paid
- High-rate debt compounds longer
- Not mathematically optimal
Head-to-Head Comparison
Same debts ($8,500 credit card at 22.9%, $12,000 car loan at 6.5%, $3,200 personal loan at 11.5%) with $800/mo total payment.
Avalanche | Snowball | |
|---|---|---|
| First debt eliminated | Credit Card (~14 mo) | Personal Loan (~7 mo) |
| Total interest paid | $3,820 | $4,210 |
| Interest difference | --- | +$390 more |
| Total payoff time | 33 months | 34 months |
| Motivation factor | Slow start, strong finish | Quick wins early |
The difference is $390 over nearly 3 years. That's about $11/month. The math gap is real but often smaller than people expect. Both methods work far better than making random payments or just paying minimums.
Which Should You Choose?
You're disciplined and math-driven
You don't need quick wins to stay motivated. You're already committed to getting out of debt and want to minimize cost.
You need momentum to keep going
You've tried paying off debt before and lost steam. You need visible progress early to build confidence.
Your interest rates are similar
When rates are within a few percentage points, the math difference is negligible. Just pick one and start.
The worst strategy is no strategy. Paying only minimums on everything, or randomly throwing extra money at different debts each month, costs far more than either avalanche or snowball. Pick one and stick with it.
The Hybrid Approach
You don't have to be a purist. If one debt is very small, knock it out first for the quick win, then switch to avalanche for the rest.
In our example: the $3,200 personal loan could be paid off in about 7 months. That's a meaningful psychological win. Once it's gone, switch to the credit card (highest rate) for the remaining debts. You get the motivation boost and most of the mathematical benefit.
Pragmatism beats purity. The best debt payoff strategy is the one you actually follow through on.
Math-Driven People
Go avalanche. You'll save the most money and pay off debt fastest. The delayed gratification won't bother you because you know the numbers are on your side. Every extra dollar kills the most expensive interest first.
Need Quick Wins
Go snowball. Eliminating that first debt in a few months is a powerful motivator. The extra interest you'll pay is worth it if it keeps you committed to the plan. A finished plan that costs slightly more beats an abandoned one.
Not Sure
Try the hybrid. Knock out any small debts first for momentum, then switch to avalanche. Or just pick one and start today. The difference between the two methods is small compared to the difference between having a plan and not having one.