Debt Snowball vs Debt Avalanche: Which Pays Off Debt Faster? (Worked Example)
Published 5 November 2026 · Sources linked inline
Both methods use the same rule: pay the minimum on every debt, then put every extra dollar on one target debt. When it is paid off, roll its payment into the next target. The only difference is the order.
- Debt snowball: target the smallest balance first.
- Debt avalanche: target the highest interest rate first.
Worked example
Three debts, with a total monthly budget of $545 ($345 of minimums plus $200 extra):
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Store card | $900 | 19% | $30 |
| Credit card | $4,200 | 27% | $105 |
| Car loan | $7,500 | 7% | $210 |
We simulated both methods month by month (interest = APR ÷ 12 on the balance each month, no new spending, fixed minimums):
| Snowball | Avalanche | |
|---|---|---|
| First debt paid off | Store card, month 5 | Credit card, month 17 |
| Second debt paid off | Credit card, month 19 | Store card, month 19 |
| Debt-free | Month 27 | Month 27 |
| Total interest | $1,956.76 | $1,860.32 |
The avalanche saved $96.44 in this case. The snowball gave a first win 12 months earlier.
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Open the Debt Snowball Calculator →Which should you choose?
- Avalanche always costs the same or less interest, because the most expensive balance shrinks first. The gap grows when the high-rate debt is also large and the rates are far apart.
- Snowball gives quicker wins. Research by Gal and McShane (Journal of Marketing Research, 2012, "Can Small Victories Help Win the War?") found that closing individual debt accounts was linked to consumers paying off their overall debt, which supports the motivational effect.
A practical rule: if the interest difference between the two plans is small (as here), pick the one you will stick with. If it is large, the avalanche is usually worth it.
Make it your plan
Enter your own debts in the free calculator above to see your payoff month. The numbers here are an illustration, not financial advice; your lender's interest method may differ slightly.