Debt Snowball vs Avalanche Calculator

Debt elimination strategies can dramatically reduce both total interest paid and time to freedom. The two dominant approaches—debt snowball and debt avalanche—offer different trade-offs between mathematical optimization and psychological motivation.

The Debt Avalanche Method

Avalanche orders debts by interest rate, paying highest rates first. This minimizes total interest paid—the mathematically optimal approach. However, if your highest-rate debt is also your largest, motivation may wane before seeing progress.

The Debt Snowball Method

Snowball orders debts by balance, targeting smallest debts first. You'll pay more interest, but quick wins build momentum. Research by Kellogg School of Management found that snowball adherents were more likely to eliminate all debt due to sustained motivation.

Choosing Your Strategy

If your highest-rate debts are relatively small, avalanche offers interest savings without sacrificing quick wins. If your largest debts carry the highest rates, snowball provides crucial psychological victories. Some combine approaches: eliminate tiny debts first for momentum, then switch to avalanche.

The Power of Extra Payments

Beyond method selection, the extra payment amount matters most. Adding even $200/month can cut payoff time in half and save thousands in interest. The freed-up minimum payments from paid debts create the 'snowball' or 'avalanche' effect.

Avoiding Common Mistakes

Don't reduce payments once debts disappear—redirect them to remaining debts. Avoid new debt while paying off old. Build a small emergency fund first to prevent credit card use for unexpected expenses. Consider balance transfer cards for high-rate debts if you have good credit.