Debt snowball vs avalanche

How the snowball method works

List all debts smallest to largest by balance. Pay the minimum on everything, throw every extra dollar at the smallest balance. When that one is gone, roll its payment into the next smallest. The momentum builds as each debt disappears.

How the avalanche method works

List all debts highest to lowest by interest rate. Pay the minimum on everything, throw every extra dollar at the highest-rate debt. Mathematically this is always cheaper — but the wins come slower because the highest-rate debt is often a large one.

Which one to pick

Avalanche saves you money on paper. Snowball saves you mentally — quick wins make people stick with the plan. The right method is the one you will actually follow through on. Most behavioral-finance research suggests that for people with lots of small debts, the snowball wins because completion rates are higher.

Example: $30,000 across 4 debts, paying $800/month

Same total paid each month, different orderings. Avalanche saves the most interest; snowball clears the most debts fastest.

Method	Total interest	Payoff time	First debt gone
Avalanche (high-rate first)	$5,820	46 months	14 months
Snowball (low-balance first)	$6,710	47 months	4 months
Minimum payments only	$24,300	128 months	38 months

Source: NerdWallet — Avalanche vs Snowball methodology

In FinWise

FinWise tracks every debt account in one view and lets you model both strategies — the debt-payoff calculator at /tools/debt-calculator compares snowball and avalanche side by side with your actual balances and rates.