Snowball vs. Avalanche: Which Debt Payoff Strategy is Best?

If you have multiple debts (credit cards, student loans, car notes), ignorance is costing you money. Randomly paying extra on different loans is the most inefficient way to get free. You need a kill strategy.

The Pain of Stagnation

Every day you carry a balance, compound interest is working against you. It is a reverse wealth building machine. Making minimum payments is a choice to stay broke.

The Debt Snowball: Motivation First

Popularized by Dave Ramsey, this method ignores interest rates. You list your debts from smallest balance to largest balance.

You attack the smallest debt with a vengeance. When it's gone, you take that payment and roll it into the next smallest debt.

* Pros: Quick wins build momentum. You feel successful immediately.

* Cons: You pay more in interest over time.

The Debt Avalanche: Math First

This method focuses on saving money. You list your debts from highest interest rate to lowest interest rate.

You attack the loan with the highest APR first (usually credit cards). Once that is paid, you move to the next highest rate.

* Pros: Mathematically superior. You get out of debt faster and cheaper.

* Cons: It can take months to see the first loan disappear.

The Easy Way: Run the Numbers

Don't guess. Use our calculator to see exactly how much interest the Avalanche saves you versus how much faster the Snowball clears your first debt.

Frequently Asked Questions

Can I switch methods?

Yes. Many people start with the Snowball to knock out a few small debts, then switch to the Avalanche for the big ones.