Snowball vs avalanche: which debt payoff strategy is right for you?
Debt snowball
Pay the minimum on every debt, then put every extra dollar toward the smallest balance. When that debt is gone, roll its minimum payment to the next smallest. The appeal: debts disappear quickly, giving you a psychological boost and freeing up cash flow sooner.
Debt avalanche
Pay the minimum on every debt, then target the highest interest rate first. Mathematically optimal — you pay the least total interest. The trade-off: if the highest-rate debt also has a large balance, it can take a long time before you eliminate your first debt.
Which should you choose?
If your debts have similar interest rates, snowball and avalanche produce similar results — pick whichever feels more motivating. If there's a big rate gap (say, a 28% card vs a 7% car loan), avalanche can save hundreds or thousands in interest. The best strategy is the one you stick to. For a single card, use the credit card payoff calculator. For a single loan, see the loan payoff calculator. To compare paying off debt vs investing, try the compound interest calculator.
Frequently asked questions
- What is the debt snowball method?
- Pay minimums on all debts, then focus extra payments on the smallest balance first. Fast wins, strong motivation.
- What is the debt avalanche method?
- Pay minimums on all debts, then attack the highest-APR debt first. Saves the most interest mathematically.
- Which method saves more money?
- Avalanche almost always saves more in interest. Snowball costs more overall but can be more motivating. The best method is the one you'll follow consistently.
- Is this calculator free?
- Yes — free, no sign-up, runs entirely in your browser.