Debt snowball vs avalanche: the same debts paid both ways
Both methods work the same way on the surface. You pay the minimum on every debt, put every extra dollar toward one target debt, and when that debt is gone its payment rolls into the next one. The only difference is which debt you target first.
- Snowball: smallest balance first. You clear whole debts sooner, which keeps you motivated.
- Avalanche: highest interest rate (APR) first. You pay less interest overall.
Instead of arguing in general terms, here are the same four debts run through both methods month by month.
The example
Minimum payments add up to $495 a month. We add $200 extra, so $695 a month goes toward debt either way.
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Medical bill | $800 | 0% | $50 |
| Store card | $1,500 | 27.00% | $45 |
| Credit card | $6,000 | 24.99% | $150 |
| Car loan | $9,000 | 7.50% | $250 |
The results
| Snowball | Avalanche | |
|---|---|---|
| Payoff order | Medical, store card, credit card, car | Store card, credit card, car, medical |
| First debt paid off | Month 4 | Month 7 |
| Debt-free | Month 30 | Month 30 |
| Total interest paid | $3,367.78 | $3,203.08 |
Avalanche saves $164.70 in interest. Snowball hands you your first paid-off debt three months sooner. Both finish in the same month here.
Why the gap is small
The two biggest interest costs, the store card and the credit card, get paid off in the same order either way. The methods only disagree about the 0% medical bill. Snowball clears it first because it's small; avalanche leaves it for last because it costs nothing to carry. That one choice is worth $164.70.
The gap grows when a large balance also has the highest rate, or when a tiny balance has a very low rate. Always run your own numbers.
Which should you pick?
- Pick avalanche if you're confident you'll stick with the plan. It's the cheapest path.
- Pick snowball if you've started and stopped before. An early win can matter more than $164.
- Either way, the extra payment matters most. Paying only the minimums on these debts would take years longer and cost far more than the difference between the two methods.
This article is for education. It isn't financial advice. Check your own balances, rates and minimums.
Run your own debts both ways. The Budget & Debt Payoff Planner handles up to 10 debts, switches between snowball and avalanche with one dropdown, rolls each paid-off payment into the next debt, and shows your debt-free date and total interest. These results were made with it.
Get the planner ($20)