Snowball vs Avalanche: Which Debt Payoff Plan Wins?
Published by Speed Credit
Table of Contents
- What Is the Debt Snowball Method?
- What Is the Debt Avalanche Method?
- Snowball vs Avalanche: Pros and Cons
- How to Choose the Right Method for You
- Next Up: Should You Consolidate Your Debt?
What Is the Debt Snowball Method?
The **Snowball Method** means paying off your debts from **smallest to largest balance**, regardless of interest rate. Here’s how it works:
- List all your debts by balance (smallest to largest)
- Make minimum payments on all except the smallest
- Throw every extra dollar at the smallest debt
- Once it’s paid off, roll that payment into the next debt
Why it works: You get quick wins. That momentum keeps you motivated to keep going.
What Is the Debt Avalanche Method?
The **Avalanche Method** pays off debt based on **interest rate**, from highest to lowest. Here’s how it works:
- List your debts by interest rate (highest to lowest)
- Make minimums on all, then throw everything extra at the highest-rate debt
- Once that’s gone, move to the next highest rate
Why it works: You save the most money on interest over time.
Snowball vs Avalanche: Pros and Cons
| Strategy | Pros | Cons |
|---|---|---|
| Snowball | Quick wins = motivation Easy to stick with Great for emotional momentum | Might pay more in interest Not always mathematically efficient |
| Avalanche | Saves more money Faster total payoff (in some cases) Great if you’re disciplined | Can feel slow at first Less emotionally satisfying early on |
How to Choose the Right Method for You
Pick the Snowball if:
- You need motivation more than math
- You’ve struggled with sticking to financial goals
- You need a win fast
Pick the Avalanche if:
- You’re focused on saving money long-term
- You can stay disciplined without quick gratification
- Your biggest balances also have the highest rates
Still not sure? Start with a hybrid: pay a small debt off first for a win, then tackle the highest interest rate next.
Next Up: Should You Consolidate Your Debt?
Combining all your debt into one payment sounds great—but is it really worth it? In the next post, we’ll break down how debt consolidation works, when it helps, and when it hurts in Should You Consolidate Your Debt?.
