Debt Avalanche vs. Debt Snowball: Which is Better?

When you are drowning in multiple credit cards and loans, picking a strategy to pay them off can be overwhelming. The two most popular methods recommended by financial advisors are the Debt Snowball and the Debt Avalanche.

But which one is actually better?

The Debt Snowball Method

The Debt Snowball method focuses on psychology and quick wins.

How it works: You list all your debts from the smallest balance to the largest balance, ignoring the interest rates. You pay the minimum on everything, and throw every extra dollar you have at the smallest debt. Once that is paid off, you take that money and roll it into the next smallest debt.

Pros: You get immediate gratification. Seeing an account drop to $0 keeps you motivated to stick to your budget.

Cons: You will pay more in total interest over time.

The Debt Avalanche Method

The Debt Avalanche method focuses entirely on math and saving money.

How it works: You list your debts from the highest interest rate (APR) to the lowest interest rate, regardless of the balance size. You throw all your extra cash at the highest interest debt first.

Pros: This is the mathematically optimal way to pay off debt. You will save the maximum amount of money on interest and become debt-free faster.

Cons: If your highest-interest debt is a massive $20,000 loan, it might take years to see that account hit zero, which can cause some people to lose motivation.

Which should you choose?

If you are highly disciplined and want to save the most money possible, use the Avalanche method.

If you need quick emotional wins to stay motivated, use the Snowball method.

Try plugging your own numbers into our free Debt Calculator to see exactly how much time and money each strategy will save you!