Debt Avalanche vs Snowball: Which Pays Off Debt Faster?

Both methods pay every minimum, then send all spare money to one target debt. The only difference is which debt gets the extra: the avalanche targets the highest interest rate, and the snowball targets the smallest balance. As each debt is cleared, its minimum rolls into the next payment.

A worked example

Take three hypothetical debts and a $300 monthly budget on top of the minimums:

Debt	Balance	APR	Minimum
Credit card	$6,000	22.9%	$150
Store card	$1,200	17.9%	$40
Auto loan	$14,000	6.4%	$320

That is $810 a month in total, paid the same way under both methods.

Result	Avalanche	Snowball
Time to debt-free	2 yr 6 mo	2 yr 6 mo
Total interest	$2,687	$2,761
First debt cleared	Credit card, month 16	Store card, month 4

The avalanche saves $74. Both finish in the same month, because the total paid each month is identical. Only the order changes, and with it how much interest builds up along the way.

Run your own debts through the debt payoff calculator.

Which should you choose?

The avalanche always costs the least. No other order can beat it on total interest. The snowball's advantage is psychological: in this example the first debt disappears a full year sooner.

When the gap is this small, pick the method you will actually stick with. When it is large, usually because one balance carries a much higher rate than the others, the avalanche's saving is worth the slower first win.

What changes the answer more than the method

The size of the extra payment matters far more than the method. Raising the budget shortens the timeline under either method, while switching between them barely moves the finish date. Stopping new borrowing on the cards matters just as much.

This example holds minimum payments fixed. Credit card minimums usually fall as balances shrink, so real payoff can differ slightly.

Source: CFPB: Credit cards.