Debt snowball vs. avalanche: which pays off faster?

Both strategies do the same basic thing: pay the minimum on every debt, then throw every spare dollar at one target debt until it's gone, then roll that payment into the next one. They only disagree on which debt to target first.

The avalanche method

Avalanche targets the debt with the highest interest rate first, regardless of balance. Mathematically, this is the cheaper strategy — it minimizes total interest paid over the life of the payoff, sometimes by a meaningful margin if one balance carries a much higher rate than the others.

The snowball method

Snowball targets the smallest balance first, regardless of rate. It usually costs slightly more in total interest, but it produces a paid-off account faster, which is where its real advantage lies: an early win that makes the plan easier to stick with over months of payments.

Which one wins in practice

On a spreadsheet, avalanche almost always wins. In practice, the method someone actually finishes wins. If a short list of debts with similar interest rates makes the mathematical difference small, the snowball's motivational edge can make it the more reliable overall choice for a given person.

A middle path

Some people target the highest-rate debt first unless a much smaller balance is sitting nearby — clearing that one quickly for a motivational boost, then switching to avalanche for the rest. There's no rule that says the method has to be pure.