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Snowball vs. Avalanche: Which Debt Payoff Method Wins?

Snowball vs. Avalanche Which Debt Payoff Method Wins
Serious mature couple calculating bills to pay, checking domestic finances, middle aged family managing, planning budget, expenses, grey haired man and woman reading bank loan documents at home

The Snowball Method

When it comes to paying off debt, there are various strategies to choose from. Two popular methods are the snowball method and the avalanche method. In this article, we will explore the differences between these two approaches and determine which one might be the best fit for you.

What is the Snowball Method?

The snowball method is a debt payoff strategy that focuses on paying off your smallest debts first. With this method, you prioritize debts based on their balance rather than their interest rates. The idea is to gain momentum and motivation by quickly eliminating smaller debts, which can help you stay motivated throughout your debt repayment journey.

How Does the Snowball Method Work?

Here’s how the snowball method works:

  1. List all your debts from smallest to largest.
  2. Make the minimum payment on all debts.
  3. Allocate any extra money toward paying off the smallest debt.
  4. Once the smallest debt is paid off, move on to the next smallest debt.
  5. Repeat this process until all your debts are paid off.

By focusing on the smallest debts first, you can quickly eliminate them one by one, creating a snowball effect as you move on to larger debts. This method can be particularly effective for individuals who value quick wins and the psychological boost that comes with paying off a debt in full.

The Avalanche Method

While the snowball method prioritizes debts based on their balance, the avalanche method takes a different approach. With this method, you focus on paying off debts with the highest interest rates first. By tackling high-interest debts early on, you can potentially save more money on interest payments in the long run.

How Does the Avalanche Method Work?

Here’s how the avalanche method works:

  1. List all your debts from highest to lowest interest rate.
  2. Make the minimum payment on all debts.
  3. Allocate any extra money toward paying off the debt with the highest interest rate.
  4. Once the highest-interest debt is paid off, move on to the next highest-interest debt.
  5. Repeat this process until all your debts are paid off.

The avalanche method can be advantageous for those who want to minimize the amount of interest paid over time. By prioritizing high-interest debts, you can potentially save more money in the long run and pay off your debts faster.

Which Method is Right for You?

Choosing between the snowball method and the avalanche method ultimately depends on your personal preferences and financial goals. Here are a few factors to consider:

Psychological Motivation

If you are someone who thrives on quick wins and the satisfaction of crossing off debts from your list, the snowball method may be a better fit for you. The sense of progress and accomplishment gained from paying off smaller debts can provide the motivation needed to stay on track.

Interest Savings

If your primary goal is to save money on interest payments, the avalanche method may be more suitable. By tackling high-interest debts first, you can potentially reduce the overall interest you pay over time, ultimately helping you become debt-free faster.

Personal Discipline

Consider your level of discipline and commitment to sticking to a debt repayment plan. The snowball method provides small victories along the way, which can help keep you motivated. On the other hand, the avalanche method may require more discipline, as it may take longer to see significant progress.


Both the snowball method and the avalanche method have their advantages and can be effective in helping you pay off your debts. The key is to choose a method that aligns with your financial goals, personal preferences, and level of discipline. Remember, the most important thing is to take action and start working towards becoming debt-free.

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