Debt Snowball vs. Debt Avalanche: Which Debt Payoff Method Is Best for You?

Tackling multiple loans and credit cards at once can make debt repayment feel like scaling a daunting mountain. Before choosing a payoff strategy, you’ll want a solid spending plan—check out our Budgeting 101: How to Create Your First Budget guide to get started. Understanding your Good Debt vs. Bad Debt is the crucial first step. From there, proven strategies like the debt snowball and debt avalanche methods give you a clear path to the summit and help you conquer what you owe.

Two popular ways to become debt-free are the debt snowball method and the debt avalanche method. Both methods can work, but they take different paths. In this friendly guide, we'll explain each method in simple terms. We'll also answer common questions like how each method works, which one saves more money, and which one might keep you more motivated. By the end, you'll know the key differences and be able to choose the method that fits you best.

What Is the Debt Snowball Method?

The debt snowball method is a way to pay off your debts from the smallest balance to the largest. Just like a snowball rolling down a hill, you start small and build momentum over time​. Here’s how it works:

• List your debts by amount owed: Write down all your debts (like credit cards, loans, etc.) and sort them from the smallest balance to the biggest balance.

• Pay the minimum on each debt: Every month, make sure to pay at least the minimum payment on all your debts so you don’t fall behind.

• Focus on the smallest debt first: Take any extra money you can find in your budget and put it toward the smallest debt on your list. For example, if your smallest debt is $500, put as much extra money as you can toward paying it off.

• Knock out that debt: Keep paying extra on that smallest debt until it’s completely gone. Congratulations! You've finished one debt. This quick win can feel really good and give you a sense of accomplishment.

• Roll the snowball to the next debt: Now take the money you were using to pay off the first debt (including its minimum payment and any extra) and add it to the payment for the next-smallest debt. This means your payment for the next debt grows larger, like a snowball getting bigger.

• Repeat the process: Continue this process for each debt, moving from the next smallest to the next, until all your debts are paid off.

Why choose the snowball method? The main reason people choose the debt snowball is because it lets you see progress quickly. Paying off a small debt fast can be rewarding and motivating​. It gives you a "quick win" early on. This boost can make you feel confident and excited to tackle the next debt. Many people find it easier to stick to their debt plan when they get a few quick successes in a row. In other words, knocking out the smallest debts first gives you momentum to keep going​.

However, one downside of the snowball method is that it does not focus on interest rates. Because you’re ignoring interest rates, you might end up paying more in interest over the entire time it takes to clear your debts​. For example, you might pay off a $300 store card at 5% interest before a $3,000 loan at 20% interest. While you get rid of the small debt faster, the bigger high-interest loan keeps accruing (adding) more interest charges in the meantime. This means the snowball method could cost you more money in interest overall if your higher-interest debts are paid off later​. Even so, the extra motivation from quick wins can be worth it if it helps you stick with your plan.

What Is the Debt Avalanche Method?

The debt avalanche method is another way to pay off debt, but its focus is different. With the avalanche method, you pay off your debts from the highest interest rate to the lowest interest rate. You can think of an avalanche starting at the top of a mountain, clearing out the biggest obstacles first. Here’s how the avalanche method works:

• List your debts by interest rate: Make a list of all your debts and order it from the highest interest rate to the lowest. (The size of the balance doesn’t matter for this list, only the interest rate on each debt.)

• Pay the minimum on each debt: As with any method, pay at least the minimum due on every debt each month to avoid late fees or damage to your credit.

• Target the highest interest debt first: Take any extra money you have and put it toward the debt with the highest interest rate. For example, if you have a credit card at 18% interest and a student loan at 5% interest, you will focus on the 18% credit card debt first, even if the balance on that card isn’t the smallest.

• Eliminate the most expensive debt: Keep paying extra on that highest-interest debt until it is completely paid off. This might take longer than paying off a small debt, but it removes your most costly debt first.

• Move to the next-highest interest debt: Once the top debt is gone, take the money you were paying on it (the freed-up minimum payment plus any extra) and apply it to the debt with the next-highest interest rate on your list.

• Continue the avalanche: Repeat this process, working down the list from higher interest rates to lower ones, until all debts are paid in full.

Why choose the avalanche method? The biggest advantage of the debt avalanche is that it usually saves you money in the long run. By tackling high-interest debts first, you reduce the amount of extra money you pay to lenders over time​. In other words, you’ll pay less in interest charges because you quickly get rid of the debts that charge you the most interest​. If you crunch the numbers, the avalanche method often costs you less overall than the snowball method. For example, one analysis found that using the avalanche method could save a borrower a few hundred dollars in interest compared to the snowball method​. Over the course of your debt payoff journey, those interest savings can really add up.

Another advantage is that by paying off high-interest debt first, you might also become debt-free faster (in theory). Since less money is leaking away in interest, more goes toward the actual debt balances each month, potentially shortening the total time needed to pay everything off. However, this only works if you can stick with the plan. Some people find the avalanche method challenging in the beginning because you might not see a debt disappear as quickly. If your highest-interest debt also has a big balance, it could take a while to fully pay off that first debt.

The main drawback of the avalanche method is that it may feel slow to see progress. You won’t get that quick win of a small debt disappearing early on. This can be discouraging if you’re someone who needs a morale boost to stay motivated​. For example, imagine your highest-interest loan is a large one that takes a year or more to pay off. During that time, you’re making payments but your total number of open debts hasn’t changed yet. It can be hard to keep going when the first victory takes a long time. Some people might feel tempted to give up if they don’t feel progress early, which is something to consider when choosing this method.

Which Method Saves More Money?

A common question is: Which method will save me the most money overall? If you look purely at the math, the debt avalanche method usually saves more money on interest costs​. Because you pay off the highest-interest debts first, you shorten the time those debts are accruing high interest charges. This means you'll pay less extra money to the lenders. In the long run, the avalanche method is usually the least expensive strategy​.

Let’s break it down in simple terms. Interest is the extra amount of money you pay for borrowing money (like the “cost” of a loan). High interest rates make debt grow faster. The avalanche method attacks the debt that is growing the fastest (the one with the highest interest) before the others. By doing that, you stop those big interest charges sooner. The snowball method, on the other hand, doesn’t worry about interest rates at first — it focuses on balances. So you might leave a high-interest debt lingering while you tackle smaller ones. That high-interest debt will keep adding charges to your balance during that time.

Example: Suppose you have two debts: one with a high interest rate and one with a low interest rate. If you use the avalanche method, you pay off the high-rate debt first. This means you stop its interest charges earlier. If you use the snowball, you might pay the low-rate (but maybe smaller) debt first and delay paying the high-rate debt. That delay means more total interest paid. Over several debts, this difference can be a lot of money.

Several financial experts note that the avalanche method can save money. In fact, paying off higher-interest debt first “may save you more money” over time​. In one scenario analysis, using the avalanche instead of the snowball saved about $150 in interest charges over the life of the debts​. The exact amount of savings depends on your specific debts (how big they are and what the interest rates are). The bigger the gap in interest rates, the more you might save with the avalanche approach.

That said, if your debts all have similar interest rates, the difference in total interest paid between the two methods could be small. Also, remember that any extra payment you make (snowball or avalanche) saves money compared to just paying minimums forever. Both methods will save you money in interest versus not having a plan at all, because you’re paying debt off faster than you otherwise would. The key takeaway is: debt avalanche is best for minimizing interest costs, while debt snowball might cost a bit more in interest in exchange for more motivation.

Which Method Is More Motivating?

Another big question: Which method will keep me motivated to stick with it? Here, the debt snowball method often wins for motivation and mindset. This is because people love a quick win. When you pay off the smallest debt, you get a rush of accomplishment. You see the number of debts you have go down quickly. This can give you confidence and energy to tackle the next debt. In simple terms, the snowball method gives you quick wins that make you feel good early on​. Each paid-off account is a clear sign of progress.

Many people find that these small successes help them stay on track. It’s encouraging to watch debts disappear one by one. It can turn paying off debt into a game where you keep scoring points (by paying off accounts). If you’re someone who needs to see results early to stay motivated, the snowball method might be a better fit for you​.

On the other hand, the debt avalanche method requires patience at the start. You might not clear any balances for a while if your highest-interest debt is large. Some people can stay motivated by focusing on the overall interest savings or by watching their total debt balance decline.

But others might feel frustrated when, after months of effort, they still have the same number of debts (just with smaller balances on them). If you're motivated by seeing accounts paid off, the avalanche method could feel like a long wait for a reward​. The feeling of reward with the avalanche method is delayed, which can make it hard to maintain momentum​.

However, motivation is personal. A very determined person might not need quick wins and could stay motivated knowing they're saving money with avalanche. Another person might get discouraged easily and need the excitement of a quick payoff to keep going. There's no wrong answer — it depends on what keeps you going.

Some experts say the best debt repayment plan is the one you can stick with until you're debt-free​. If paying off a small debt early will encourage you, then snowball might make you more likely to succeed in the long run because you'll actually complete the plan. If seeing the math of interest savings inspires you and you won’t lose steam, avalanche could be the winner for you. The most motivating method is the one that matches your personality and helps you stay on track.

Side-by-Side Comparison: Snowball vs. Avalanche

To make the differences extra clear, here is a comparison of the debt snowball and debt avalanche methods side by side. This table highlights the main idea of each method, the big benefit, and the potential downside:

Feature	Debt Snowball	Debt Avalanche
Payoff Order	Smallest balance first, then the next smallest.	Highest interest rate first, then the next highest.
Main Goal	Get quick wins by clearing debts early.	Save money by reducing interest costs overall.
Key Advantage	Very motivating – you see progress fast as small debts disappear​.	Cost-effective – you pay less in interest over time​.
Primary Drawback	Might pay more in interest by not tackling high-rate debt first​.	Can feel slow – no early quick win, which might be discouraging​.
Best For	Those who need early success to stay motivated and keep momentum.	Those who want to minimize total interest and can stay focused without quick wins.

Both methods involve rolling over payments from one debt to the next. This means no matter which plan you choose, when you finish paying off one debt, you take the money you were paying there and add it to the next debt’s payment. In the snowball, you roll it to the next smallest balance; in the avalanche, you roll it to the next highest interest debt. In the end, both methods will eliminate all your debts if you stick to the plan. The difference is just the order you tackle them and how that affects your interest paid and motivation along the way.

It’s also worth noting that you don’t have to follow either method perfectly. Some people might start with the snowball method to get a few quick wins, then switch to avalanche for the remaining debts. The most important thing is having a plan and paying extra beyond the minimum whenever you can.

Choosing the Right Method for You

So, debt snowball vs. debt avalanche — which should you pick? The answer depends on your personality, your financial situation, and what will keep you on track. Here are a few final tips to help you decide:

• Know yourself: Think about whether you really need quick wins to stay motivated. Ask yourself, Do I need to see a debt paid off soon to feel motivated? Or Am I okay with a slow and steady approach if I know it saves me money? Be honest with yourself about what will encourage you to stick with your plan​.

• Look at your debts: If one of your debts has a very high interest rate (for example, a high-interest credit card), the avalanche method could save you a lot of money on that debt. But if all your debts have similar interest rates, the interest savings from avalanche might be small, so you might prefer snowball to gain momentum.

• Consider a mix: Remember, it's not absolutely all-or-nothing. You could pay off one small debt first (to get a win and simplify your list of debts), then switch to avalanche for the rest. The best plan is the one you can stick with until you’re debt-free – even if it's a combination of both methods​.

• Make a commitment: Once you choose a method, try to stick to it. Consistency is key. The sooner you pay off each debt, the less interest you pay overall, and the closer you get to financial freedom. Any progress is good progress. Avoid taking on new debt while you're working your plan, so you don't slide backward​.

• Stay motivated: Find ways to keep yourself motivated during the journey. You can track your progress on a chart or celebrate small milestones (like when a balance drops below a certain number or when a credit card is paid off). Keeping the end goal in mind – a life free from debt – can also help you stay focused and positive.

Final Thoughts

Both the debt snowball and debt avalanche methods have helped many people become debt-free. Neither method is “wrong.” They each have pros and cons, but they both aim for the same result: getting rid of debt. The debt snowball method might make the journey feel easier by giving you confidence and motivation early on, especially if you find it hard to stick with long-term goals. The debt avalanche method might reward you with a lower total cost, which is important if you want to save as much money as possible.

In the end, the best debt payoff method is the one that works for you and keeps you going. It could be the emotional boost of the snowball, the logical savings of the avalanche, or even a mix of the two. What matters is that you make a plan and commit to it. Once you start seeing your balances fall, you’ll know you’re on the right track. Over time, you’ll build good financial habits and, most importantly, free yourself from the burden of debt. You've got this, and every step – no matter how small – is a step closer to your goal of being debt-free!