Debt Snowball vs. Avalanche: What's the Difference?

Your preferences will help you pick the right option

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Photo: Cavan Images / Getty Images

Two popular methods people can use to pay off debt include the "debt avalanche" method and another called the "debt snowball."

With the debt avalanche, you pay off your debts in order by interest rate. It's also sometimes called the "high interest rate" method. With the debt snowball, you pay off debts starting with the lowest balance.

Each method has its pros and cons, so before deciding how to tackle your own debt, it's important to understand what each strategy entails and why one method may be better for your own situation.

Key Takeaways

  • The debt snowball and the debt avalanche are two popular methods of attacking consumer debt.
  • Both methods start with a list of debts. The avalanche arranges debts from highest interest rate to lowest. The snowball arranges debts from smallest balance to largest, irrespective of interest rate.
  • Both methods require you to pay only the minimum due on all debt, with any extra funds directed to paying down the debt at the top of the list.
  • The avalanche method saves the most money. The snowball method may help keep you motivated as you progress through the list.

What's the Difference Between the Debt Snowball and Avalanche?

Debt Snowball Debt Avalanche
Pay off debt starting with the lowest balance Pay off debt starting with the highest interest rate
Will pay more in interest Will save money on interest
Provides frequent "wins" May get frustrated paying on larger balances for a long time
  • With the debt snowball, you pay off debt starting with the lowest balance first.
  • With the debt avalanche, you pay off debt starting with the highest interest rate.
  • You will pay more in interest with the debt snowball method.
  • The debt snowball allows you to completely pay off debts more quickly, which can help keep you motivated.
  • With the debt avalanche, if you have a high interest debt with a high balance, you may get frustrated with the amount of time it takes to pay it off.

The Debt Avalanche Method

The debt avalanche method starts with a list of all your debts ranked by interest rate, from highest to lowest.

For example, you might owe:

  • Mastercard, $2,500: 19%, highest interest rate
  • Visa, $7,500: 13%, second-highest interest rate
  • Car loan, $4,000: 8%, third-highest interest rate
  • Student loan, $1,900: 5%, lowest interest rate

To get started, you will make the minimum payment on all your loans. Then, you should throw all of your extra money toward paying off your your highest interest rate debt. That's the Mastercard in our example, which has the highest interest rate at 19%. The idea is that the sooner you shrink and eliminate that 19% debt, the less you'll pay in compound interest.

Once you've wiped away your Mastercard debt, tackle the Visa balance, which has the second-highest interest rate, at 13%.

It'll take you a long time to repay the Visa, since it has the highest balance, at $7,500. Stick with it. Whenever you're done, you can start paying off the debts with lower interest rates.


The debt avalanche method saves you the most money in interest payments, but it might take a long time to get a high-balance debt crossed off your list.

You may feel frustrated after investing so much time and energy toward paying down a loan without feeling the mental victory of crossing it off your list. That's where the debt snowball comes in.

The Debt Snowball Method

According to the snowball method, you should throw every spare penny toward paying off the loan with the smallest balance first, regardless of the interest rate.

If you used the snowball method, you would re-order the list above as follows:

  • Student loan, $1,900: 5%, lowest balance
  • Mastercard, $2,500: 19%, second-lowest balance
  • Car loan, $4,000: 8%, third-lowest balance
  • Visa, $7,500: 13%, highest balance

As with the avalanche method, you'd make the minimum payment on all your loans. Then, you'd throw every extra penny toward the debt with the smallest balance, regardless of the fact that, in this particular case, it also has the lowest interest rate.


The idea behind this method is that paying off the loan with the smallest balance will give you the psychological feeling of victory when you cross that loan off your list. That mental win will motivate you to continue saving money and repaying your debts one after another.

While this method gives you a more immediate feeling of victory, it might cost more. Making only minimum payments on your highest-interest debt means you'll pay more in interest, as compared to the debt avalanche method.


If you have a smartphone, there are apps to help you organize, track, and eliminate your debt more quickly.

The Bottom Line

Personal finance is just that—personal. Paying off debt can be a little like dieting. Sure, there are ideal eating plans out there, but let's be realistic: Most people aren't going to stick to a perfect diet. The best diet is the one you'll stick to.

Paying off debt is similar. Be honest about making a budget that fits your personality and keeps you motivated. You'll pay the most in interest if you don't stick with your debt payoff plan.


It's OK to experiment, too. If the debt avalanche method sounds more appealing to you right now, you can try it out for a few months. If you then find that it's not working, there's no reason you can't switch to the debt snowball method.

Having a plan is a good idea, but that doesn't mean you need to hold yourself to it 100% of the time, 365 days of the year. Things change, life throws curve balls at you, and you need to adapt. That sometimes means changing your financial strategies. Don't beat yourself up if the first method you try doesn't work. Keep at it until you find something that does.

Frequently Asked Questions (FAQs)

Is the debt avalanche or debt snowball better?

Both of these debt reduction strategies will help you shrink, or even eliminate your debt. The avalanche method gets the nod in terms of saving you money. Its focus on paying down the highest interest debt first means you'll pay less interest over time, provided you stay motivated and on track. Adherents of the snowball method say that despite its extra cost, it will help you stay motivated and build momentum.

How does the debt snowball work?

The debt snowball debt repayment strategy starts with a list of your debts, arranged from smallest balance to highest. You pay the minimum on all of your debts, and then anything extra you have in your budget goes toward paying the smallest debt. Once that's cleared, you move to the next-smallest debt, and so on.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Consumer Financial Protection Bureau. "How to Reduce Your Debt."

  2. Experian. "Debt Snowball Strategy: How Does It Work?"

  3. Experian. "The Debt Avalanche Method: How It Works and When to Use It."

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