Debt Snowball vs Avalanche Calculator
The avalanche method always costs less. The snowball method is completed more often. This shows you the size of the trade-off in your own numbers.
The two methods
Both pay the minimum on every debt and direct all spare money at one target. They differ only in which target.
Avalanche attacks the highest interest rate first. This is mathematically optimal: it always clears the debt fastest and costs the least in total interest, because you are eliminating the most expensive interest first.
Snowball attacks the smallest balance first, regardless of rate. It costs more, and it produces a cleared debt sooner — which matters because the hardest part of debt repayment is not the arithmetic.
In both, the key mechanic is the same: when a debt clears, its minimum payment is added to the attack on the next one. The amount you throw at the debts grows each time one falls, which is why the last debts disappear so much faster than the first.
Which to choose
Compare the two figures above. If the snowball costs a few hundred more over several years, and the early wins are what will keep you going, take the snowball. If the gap is large, take the avalanche.
Research on this is genuinely interesting: studies of real debt repayment have found that people following the smallest-balance-first approach were more likely to eliminate their debt entirely, despite paying more interest. A plan you complete beats an optimal plan you abandon.
A practical hybrid that works well: clear any very small balance immediately for the psychological win and the reduced admin, then switch to strict highest-rate order for everything else.
Things that beat both methods
Before optimising the order, consider whether you can reduce the rate itself:
- A 0 % balance transfer. A fee of 2–3 % buys 12–24 months interest-free. Divide the balance by the number of interest-free months and pay exactly that, or the debt simply reappears at the end.
- A lower-rate consolidation loan, provided you do not then re-use the cleared cards. That failure mode is extremely common.
- Asking for a rate reduction. Card issuers sometimes reduce rates for customers with good payment histories who ask.
- Checking the order of your own spending. No repayment strategy survives continued borrowing.
If the minimums are already unaffordable, neither method helps. Free debt advice charities in most countries will negotiate with creditors, often freezing interest and agreeing a reduced payment. Contacting one early is much better than waiting for arrears to build.
Frequently asked questions
Which method is better?
Avalanche costs less; snowball gets finished more often. Use the figures above: if the extra cost of the snowball is small relative to the total, the motivational benefit is usually worth it. If it is large, take the avalanche.
Should I pay off debt or save?
Build roughly one month of essential expenses first, then clear anything above about 8 % interest, then build the full emergency fund. Paying off a 22 % debt is a guaranteed 22 % return, which no savings account or investment reliably matches.
Does paying off debt improve my credit score?
Usually yes, mainly by reducing credit utilisation — the proportion of your available credit in use. Keeping a cleared card open and unused often helps more than closing it, because closing it reduces your total available credit.
Should I use savings to clear debt?
Mathematically yes, when the debt rate exceeds the savings rate, which it almost always does. Keep one month of essentials as a buffer, though — clearing savings entirely tends to lead straight back to the card at the next unexpected bill.