Debt Avalanche vs Debt Snowball
The avalanche approach prioritizes high-rate debt, while the snowball approach prioritizes smaller balances.
How the math works
Avalanche orders debts by interest rate, paying extra toward the highest-rate balance first, which minimizes total interest paid mathematically. Snowball orders debts by balance size, paying off the smallest balance first regardless of rate, which produces faster visible 'wins' that can sustain motivation.
Worked example
With three debts — $1,000 at 22%, $4,000 at 18%, and $9,000 at 9% — avalanche tackles the $4,000 at 18% first (mathematically optimal), while snowball tackles the $1,000 first (psychologically motivating), even though it carries a lower rate than the $4,000 balance.
What to watch for
- Avalanche generally saves more in total interest, sometimes only modestly, depending on how close the rates are
- Snowball's early wins can matter more in practice if they're what keeps someone consistent with extra payments
- Either method requires making at least minimum payments on every debt — the order only affects the extra amount
Practical takeaway
Choose avalanche if the interest-rate gap between your debts is large; choose snowball if you're more likely to stick with a plan that shows faster visible progress.