Debt Snowball or Debt Avalanche: Which is Better?

Struggling with debt? You’re not alone. Two popular strategies—the debt snowball and debt avalanche methods—can help you take control of your finances. Understanding these approaches is the first step to paying down debt solo or seeking a structured plan. 

The debt snowball and debt avalanche methods differ in focus, but both have the potential to lead you to a debt-free life. Let’s dive into how they work, and which one might suit you best.

Debt Avalanche

The debt avalanche method is all about efficiency. It targets your debt with the highest interest rate first—usually a credit card—while keeping up minimum payments on everything else. This approach saves you money by cutting down the total interest you pay over time.

Here’s how the debt avalanche method works:

1. List your debts from highest to lowest interest rate.

2. Throw extra cash at the debt with the highest interest rate.

3. Pay the minimum on all the other debts.

4. Once the highest-interest debt is paid off, move to the next highest.

5. Repeat until you’re debt-free.

Think of the debt avalanche method as tackling the toughest challenge first—like an avalanche crashing down a mountain. It’s a smart, aggressive way to reduce your debt load fast. That said, it demands discipline, especially when cash is tight, since the savings build over time rather than showing quick wins.

Example debt avalanche method

Say you have four debts: a student loan, two credit card balances, and a car loan. 

You currently pay minimum payments, and this month you have $50 extra to put toward debt. To execute the avalanche strategy, pay off the highest interest rates first, in the order shown below:

This month, you’d pay $1,535 total (minimum payments plus your extra $50 toward credit card B). 

Once Credit Card B is paid off, you take that $350 and add it to the $47 payment you’re making on Credit Card C. Once that debt is paid off, you take the entire $397 and add it to your $985 student loan payment. By the time you’re done paying off the first three debts, the car loan will already be paid off.

You’d pay off your debt in 90 months and spend $136,831. The debt avalanche would save more than $9,000 in interest costs, and pay off 31 months faster than making only the minimum payment.

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Debt Snowball

The debt snowball method focuses on motivation. It starts with your smallest debt, regardless of interest rate, to give you quick victories that fuel your drive. Like a snowball rolling downhill, your payoff capacity grows as you bowl over debts one by one.

Here’s the debt snowball method in action:

1. List your debts from smallest to largest balance.

2. Put your extra funds toward the smallest debt (in addition to the minimum payment).

3. Make just the minimum payments on all the other debts.

4. After clearing the smallest debt, roll that payment into the next smallest debt, and keep going.

The debt snowball method shines because it plays into our craving for short feedback loops. Paying off smaller debts early boosts confidence and keeps you committed to crushing the rest.

Example debt snowball method

Say you have four debts: a student loan, two credit card loans, and a car loan. (These are the same numbers from the debt avalanche method—see direct comparison in the following section.)

You currently make minimum payments, and you have $50 extra to put toward debt. To execute the snowball strategy, pay off the smallest balances first, in the order shown below:

You’d pay off your debts in 90 months, and spend $137,286 to eliminate your debt. 

The debt snowball would pay off these debts 31 months faster than making only minimum payments. Plus, you'd pay off your first debt within two years—building momentum that you can put toward paying off bigger debt. 

What’s Faster, the Debt Snowball or the Debt Avalanche?

You might have noticed that both the snowball and avalanche methods could clear your four debts in 90 months. The final payment in the avalanche method would be $455 smaller. 

It’s true that the avalanche method would save you money in interest charges by clearing the most expensive debts first. But it’s also true that the avalanche method typically won’t get you out of debt more than about one month sooner compared to the snowball method. In some cases (like our example), it won’t save you any time at all.

The thrill of paying off a debt sooner might be more motivating than the hope of saving a few hundred dollars years from now. 

Which Debt Reduction Method Is Right For You—Debt Snowball or Debt Avalanche?

The debt snowball is usually the best way to reduce debt. The upside—momentum—is massive, since many debtors struggle with motivation. And the downside—more interest payments—is often low, sometimes peanuts.

Example debt payoff comparison

Let’s take the debt scenario used in the previous sections. You have the following four debts:

Your total debt is $101,500. To pay this off, you have three options: minimum payments, the debt snowball method, or the debt avalanche method.

Here’s what the results look like:

Using the avalanche or the snowball method could make you debt-free two and a half years earlier than just minimum payments, and save you $8,700 to $9,200. Both methods are superior to making minimum payments. 

Mathematically, the avalanche looks best, but there’s more to the story. The avalanche method might save you a few hundred dollars compared to the snowball…but that assumes you stick to the plan. Sticking to the plan is the hardest part, something everyone struggles with.

You know what helps you stick to the plan? The snowball method.

So, which DIY debt payoff strategy is better?

For most people, the debt snowball method is better.

Sure, the table above shows you could, in theory, save $455 by choosing the debt avalanche.

But what the table above doesn’t measure is motivation levels. By using the debt snowball method, you’re more likely to actually stick to the plan. In the words of Dave Ramsey, “Debt is not a mathematics problem—it’s a behavioral problem.” 

Only you can say whether your debt was caused by behavior or circumstances. But to solve a behavioral problem, pick the debt snowball. It’s that simple. Also worth noting: You can combine the methods if you want. For instance, you could get the snowball going, find that it motivates you to keep paying off debt, and switch to the avalanche for the rest of your debts. Combining methods is sometimes called a debt blizzard.

Read more: How to Get Out of Debt Without Paying

Combining Debt Consolidation With Snowball or Avalanche

Debt consolidation is a strategy that uses a new loan to combine multiple debt payments into a single, usually lower-interest, monthly payment. This could make it easier to track debt. Plus, if you consolidate debt into a lower-interest one, you could get a lower monthly payment, save on total interest charges, or both.

Once you consolidate some debts, you can adjust your debt payoff strategy around the combined sum, moving it up or down the checklist alongside debts you didn’t include in the consolidation loan.

Find the Best Solution For Getting Out Of Debt

Ready to tackle your debt? The debt snowball and debt avalanche methods are great places to start. But if managing debt solo feels overwhelming, Freedom Debt Relief can step in. Our Certified Debt Consultants can explore options like our debt relief program to guide you toward financial freedom. Curious if you qualify? Find out today.